The Association of Professional Pension Trustees (APPT) has written to the Institute of Chartered Accountants in England and Wales (ICAEW) expressing membership concerns about the amount of time and resource required to respond to enquiries about pension schemes from auditors of companies sponsoring pension schemes.
Nita Tinn, APPT chair, said: “The APPT has written to the ICAEW expressing concerns about information requests from the auditors of pension scheme sponsors. These requests are often excessive and seem to disregard both the regulatory framework within which pension schemes operate and the legal relationship between pension schemes and their sponsors.”
The letter – written by Tinn and addressed to Andrew Penketh, chair of ICAEW – stated that the Financial Reporting Council (FRC) had identified deficiencies in the audit of the pension disclosures in the financial statements of sponsoring employers and the APPT broadly welcomed the drive of the FRC to improve audit quality.
It added that the need for some additional information was understood but the recent experience of the association’s membership was that the detail being requested appeared to be excessive.
It said that requests for trustee meeting minutes and detail of other governance activities of a separate entity to the sponsor were not seen as “being necessary for the purpose of auditing the balances and disclosures in the sponsor’s financial statements”.
Tinn’s letter also mentioned that enquiries were being made directly to the pension scheme administrator or investment managers, while neither these entities nor the trustees have a relationship with the sponsor’s auditor and are under no obligation to provide information requested in this way.
“Information must be requested via the sponsor and, where the provision of information is agreed, it will be provided to the sponsor where either appropriate data sharing agreements are in place or there is a legal requirement,” Tinn wrote.
“It must also be recognised that the pension scheme is a separate legal entity to the sponsor and the sponsor neither exercises any control over the trustees of the pension scheme nor has a right to confidential information which may be sensitive,” she added.
The APPT is urging the ICAEW to act so that future information requests are “relevant” and “proportionate.”