Pension Scheme Audits: Regulatory Requirements and Best Practices

Pension scheme audits represent a specialised area of audit practice, with specific regulatory requirements, accounting standards, and reporting obligations. For finance directors with responsibility for pension schemes, understanding audit requirements, regulatory compliance, and best practices is essential for ensuring scheme governance, member protection, and regulatory adherence.

Pension Scheme Audit Requirements

Occupational pension schemes are generally required to have their accounts audited, with specific requirements varying by scheme type and size. Finance directors must understand which audit requirements apply to their schemes and ensure appropriate audit arrangements are in place.

Defined benefit schemes face particular audit complexity, with requirements to audit scheme accounts, actuarial valuations, and compliance with funding requirements. Finance directors should ensure that audit processes address these requirements comprehensively.

Regulatory Compliance and The Pensions Regulator

The Pensions Regulator oversees pension scheme compliance, with requirements for scheme governance, funding, and member communication. Finance directors must ensure that schemes comply with regulatory requirements and that appropriate governance structures are in place.

Regulatory compliance includes requirements for scheme returns, actuarial valuations, and funding statements, with finance directors ensuring that these are prepared accurately and submitted on time. Failure to meet regulatory requirements can result in regulatory action and potential penalties.

Actuarial Valuations and Funding

Defined benefit schemes require regular actuarial valuations to assess funding positions and determine contribution requirements. Finance directors should understand actuarial valuation processes, funding requirements, and the implications for employer contributions and scheme sustainability.