Practical Pension Scheme Accounting
Practical Pension Scheme Accounting, from Crowe U.K. LLP provides expert analysis and practical guidance on the preparation of accounts for occupational trust based pension schemes under the 2018 Statement of Recommended Practice (SORP). Beginning with the trial balance, the authors explain what information is needed to prepare Financial Statements and how to go about compiling the Annual Report.
Written in an accessible style, it provides practical guidance on the requirements of the SORP, providing examples and options on the approach to the requirements; ranging from the required disclosures, to additional disclosures that could be considered in relation to the investment risk and investment hierarchy disclosures. It contains a disclosure checklist and example accounts to ensure all required disclosures have been considered, as well as guidance on what to consider when preparing a Defined Contribution Chair’s Governance Statement.
Key updates include the following:
Chapter 4: Trustee’s Report
- Example Trustee Report disclosures now incorporate the investment policy disclosure requirements that came into force in October 2020. (4.2.1)
- Reporting requirements in respect of the new Task Force on Climate-related Financial Disclosures are outlined, including the new requirement from 1 October 2022 for schemes with assets of £1bn or more to disclose a metric describing the extent to which their investments are aligned with the Paris Agreement goal of limiting the increase in the global average temperature. (4.2.7)
Chapter 6: DC Chair’s Statement Governance Statement
- The latest requirements for DC Chair’s Governance Statements are included, including the new net returns on investments and, for specified schemes, a value for members assessment. (6.7 and 6.8)
Chapter 7: Auditor’s Report and Auditor’s Statement about Contributions
- The requirement for auditor’s to explain the extent to which the audit was considered capable of detecting irregularities, including fraud has been reflected in the example audit report. (Example 7.1)
Chapter 9: Financial Statements – Statement of Net Assets (available for benefits)
- Highlighted that when an estimation technique is used to determine the fair value of an investment, the scheme should disclose the significant assumptions applied in determining that fair value. (18.104.22.168)
- Some of the example derivative disclosures have been refreshed in light of the updated derivatives guidance issued by PRAG, there have been no significant changes to the examples provided, although they now include options which were not included in the previous publication.(9.1.9)
Appendix 6: Going concern assessment – example documentation
- Updated to take account of current issues impacting scheme’s and their employers. (Example A6.1)
The example accounts and checklist included in the appendices have also been updated to reflect these updates.