Whilst financial reporting is a key area in the management of your pension scheme, accounting disclosures should be straightforward to produce in terms of your time and spend on adviser fees. Where real value can be added is if your actuary is proactive in identifying potential accounting issues and opportunities at an early stage.
Increasingly auditors are taking a much stronger line on their house view of what is appropriate methodology and assumptions. That is why you will want an actuary of sufficient calibre to work with your auditors to ensure that an appropriate final position is reached.
At bac, our team has substantial financial reporting experience. We can offer fixed fee solutions to cover some or all of the following areas, tailoring our package to suit your needs.
- assumptions setting
- production of disclosures
- discussions with auditors
- proactive updates on developments in the regulatory framework or investment markets that could impact your financial statements
- understanding the accounting implications of strategic actions, such as asset de-risking, liability management and revised funding agreements
- regular accounting updates, so you can track your plan’s position throughout the year
The Finance Director of a FTSE 100 client asked us to carry out an independent review of the assumptions being proposed for the year-end disclosures. Whilst there was some room for movement in the financial assumptions, we identified significant prudence in the demographic assumptions, in particular mortality and proportions married. The removal of this prudence meant the disclosures were a better fit with the accounting requirements and resulted in an improved balance sheet and P&L position. We often see demographic assumptions used for funding purposes carried over to accounting advice without much thought.
In the news this week, the pensions world continues to be dominated by the impact of the Covid-19 pandemic, with the Regulator publishing more guidance for employers, the FCA delaying the implementation of its drawdown investment pathways and two household name companies deferring (or missing) their deficit recovery contributions.
Over the autumn of 2019, BAC conducted an extensive survey of the actions which companies are taking to manage their defined benefit (DB) and defined contribution (DC) pension arrangements.
2019 marked 50 years since Neil Armstrong walked on the moon and this was obviously on the Queen’s mind in her Christmas message as she talked about a bumpy year but one with small steps of progress as well. In terms of pensions, it also felt like a year of small steps and occasional bumps. In this quarter’s Arena, we take a positive look back at 2019, as well as looking forward to some expected pension developments over 2020.
Despite the very different circumstances facing individual companies, bac‘s autumn 2019 survey reveals a surprisingly consistent picture of the actions which companies are finding most attractive to manage their DB and DC pension arrangements.
As DB liabilities have become legacy issues to be managed, governance has become the umbrella term for a broad range of risk management tools. In this publication, we look at the DB governance solutions we have helped our clients to implement.