The Association of Professional Pension Trustees (APPT) has written to the Institute of Chartered Accountants in England and Wales (ICAEW), expressing concerns regarding how auditors are requesting scheme information.

It acknowledged that the Financial Reporting Council (FRC) had identified deficiencies in the audit of pension disclosures in the financial statements of sponsoring employers and accepted that additional information was required.

However, the APPT said its membership’s experience was that the detail being requested was excessive, disregarding of the legal relationships, disregarding of the regulatory requirements of the scheme, and inadequately planned.

The organisation argued that requests for trustee meeting minutes and detail of other governance activities of a separate entity to the sponsor were not necessary for auditing purposes by its members.

Additionally, it stated that enquiries were being made directly to the scheme administrator or investment managers, when requests should be made via the sponsor.

In the letter, APPT chair, Nita Tinn, said: “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.”

The APPT added that, when some sponsors’ auditors were planning and performing their work, there was “no apparent consideration” for the work done by other experts that had produced audited accounts and actuarial valuations.

Sponsors’ auditors were also accused of requesting information with short turnaround periods and not giving consideration to authorities that might need to be put in place with third parties to enable information to be released.

Tinn concluded: "It is also important to recognise the requirements of data protection legislation. Whilst the provision of personal information for legitimate purposes is permitted and information may be anonymised, trustees and their data processors must assess the purpose and consider the amount of information that can legitimately be provided.

“There should also be greater clarity about the roles and responsibilities as the corporate disclosures are not the responsibility of the trustees and their advisers. The provision of information may be more reasonably be the responsibility of the corporate advisers.

“Trustees do not want to be unhelpful, but you will appreciate that there is a cost to the provision of information.

“We urge that consideration is given to formalising the approach to requesting
information and that the information requested is clearly relevant and proportionate reflecting the fact that the pension scheme is a separate legal entity.”

In response, an ICAEW spokesperson said: “We have been made aware of the concerns through ICAEW’s Pensions Sub-Committee and are currently considering what steps might be taken to address these issues.”

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