One fifth of pensions professionals fear that the new Statement of Recommended Practice (SORP) for pension scheme accounting could raise the cost of preparing statutory accounts, according to a recent survey.
The survey, conducted among 80 pensions professionals, found that more than 20 per cent feared that SORP could raise the cost by more than 25 per cent.
Philip Briggs, audit director for Baker Tilly's Pensions Group, which conducted to survey, said:
"Many accountants responsible for preparing pension scheme accounts will face a real challenge in complying with the new rules which come into force this year, and our survey shows that many fear that this will lead to increased compliance costs.
"Pensions accountants will need to identify likely problem areas for individual schemes as early as possible, and agree a plan of action to ensure the transition to the new standards can be effected as efficiently as possible," he said.
The results also revealed that respondents were split on the areas which would be likely to pose the most difficulty.
Just over a third thought that additional investment risk disclosures would be the most problematic issue, while the remainder were equally split as to whether the fair value hierarchy or the requirement to value annuities would cause the greatest difficulty.
The revised SORP for pension schemes, introduced as a consequence of the introduction of FRS102, the new financial reporting standard for the UK and Republic of Ireland, applies to financial statements for accounting periods commencing on or after 1 January 2015.
"The questions in our survey focussed around the costs of preparation of the accounts under the new requirements.
"Any associated increase in audit costs will be significantly mitigated if attention is paid to the collation of documentation and analysis to support the new disclosures and particularly those concerning the investment portfolio," said Philip Briggs.
The Baker Tilly survey also sought views from trustees on the value of the audit.
A large majority of 90 per cent said they viewed audit as an important feature of good governance, although 30 per cent of this group thought a more simplified audited return of net assets would be sufficient.
First published 01.04.2015
Lindsay.sharman@wilmingtonplc.co.uk
