The Department for Work and Pensions (DWP) has been urged to repeal or amend the regulations in relation to the contents of pension schemes' annual reports, amid concerns over the level of complexity and duplication in current reports.

An open letter from the Joint Industry Forum (JIF) on workplace pensions pointed out that pension scheme annual reports and accounts have become very long and, in some cases, longer than corporate annual reports, extending to over 200 pages.

According to the letter, one of the key reasons for this length is the number of additional statements that are required within the report, including the Annual Governance Statement for defined contribution (DC) occupational pension schemes, or DC Chair's Statement, an engagement policy implementation statement, and climate change governance reporting.

In addition to this, it noted that, due to the requirements relating to the Annual Governance Statement, many trustees of DC schemes include the whole Statement of Investment Principles in their annual report.

Furthermore, while not required, some trustees of defined benefit (DB) schemes include the Statement of Investment Principles because of references to it within the Implementation Statement.

However, the JIF warned that the annual reports are becoming less ‘readable’ due to the sheer volume of information, acknowleding that the length of annual reports is one of the most common criticisms.

"This length makes them unwieldy, of little use to members and costly to produce," the letter stated. "Much of the information is required to be published elsewhere and by being duplicated in the annual report, the audited accounts are being diminished in value."

It also argued that there is "consensus" throughout the pensions industry that the annual report is not the right place for these statements, highlighting the number of signatories as evidence of this.

Signatories to the letter included the Pensions Research Accountants Group (PRAG), Association of Consulting Actuaries, the Association of Pension Lawyers, the Institute and Faculty of Actuaries, the Pensions Administration Standards Association, the Society of Pension Professionals, and the Pensions and Lifetime Savings Association.

The letter also suggested that the removal of these statements would simplify the annual report and mean that it is more likely to be read, as well as help avoid delays in signing off reports and accounts.

PRAG executive, Shona Harvie, said: "The annual report has become a repository for additional information required by the regulations.

"This information makes the annual report very lengthy and this is one of its most common criticisms.

"This additional information also makes the annual report unreadable to the scheme members due to its length and complexity, costly to produce, causes delays in signing the financial statements and adds no value as the information is already publicly available."

---