UK: Pension Audit Services

Last Updated: 27 October 2011
Article by Matthew Maneely, Stephen Drew and Julie Mutton

Pension schemes are facing both an increasing burden of costs and a spiralling level of risk and regulation. Smith & Williamson provide a cost effective, hassle-free audit experience.

Our expertise in the pensions sector is reflected in the experience of our team and by our representation on a number of key bodies influencing the sector such as:

  • The Pensions Research Accountants Group
  • The Society of Pension Consultants
  • The National Association of Pension Funds
  • The ICAEW Pensions Technical Discussion Group

We act for more than 130 schemes as scheme auditors. Our target market includes schemes with assets ranging from £100m to £2bn.

We are confident that the breadth of our experience means that we will have already encountered most of the situations schemes are likely to face going forwards. Our audit team includes ex scheme administrators, which helps us provide practical recommendations on systems and practices that schemes can be confident will work.

We provide pragmatic advice on the accounts ensuring that trustees are able to tailor their financial information in the most suitable way for their members' needs and to meet the latest disclosure requirements.

Our experience of dealing with many schemes having complex investments means we are able to assist in the preparation and disclosure of these investments within the accounts.

Our Approach

  • We operate a specialist pension audit department with staff devoting 100% of their time to this field.
  • We have invested heavily in developing our people, skills and experience in order to meet the sector's needs.
  • A combination of sensible charge rates, a focus on service delivery and specialist knowledge enables us to deliver a thoroughly cost effective service.
  • We provide a high quality service with excellent communication and advice on potential issues through a range of methods. We know that an open dialogue and involvement with schemes and their advisors is crucial to developing a successful relationship.
  • We combine a robust audit process with commitment to provide support where needed. Having extensive knowledge of the pension scheme sector and by investing time in getting to know each scheme, as auditors, we are in a privileged position to understand a scheme's needs.
  • We check a sample of benefit calculations as a standard part of each audit to provide comfort that the calculations are materially correct.
  • We are pro-active in our approach and our excellent pensions audit knowledge brings a new perspective on issues for schemes. By sharing our experience from elsewhere in the sector we offer an educated challenge on issues for schemes and their stakeholders.

Breadth of audit services

As you would expect from a top ten accountancy firm our audit team can provide schemes with other services, which include:

  • preparation of scheme accounts
  • review of scheme providers against service level agreements
  • preparation and filing of scheme tax returns
  • reviewing in detail the transition of investments between investment managers
  • auditing performance related fees paid to advisers
  • advising schemes and advisors on detailed disclosures in scheme accounts
  • acting as returning officer in member nominated trustee elections
  • review of scheme governance procedures
  • review of risk management processes
  • system reviews
  • secondment of specialist staff.

Related services

In addition to our audit capability we offer a wide range of other pensions and employee benefit services, which include:

  • pension scheme consultancy
  • advice to trustees
  • benefit benchmarking
  • reward and flexible benefits
  • job evaluation and pay systems
  • employment tax advice
  • payroll services
  • executive reward
  • review of employer covenants
  • scheme design and implementation
  • pre retirement and executive counselling
  • facilitation of actuarial and independent trustee services.

Pension Industry Group

We have a pensions industry group, bringing together pensions experts from various disciplines within Smith & Williamson. This group acts as a forum for sharing best practice, analysing and discussing regulatory and other key changes in the sector, evaluating strategies to deal with these changes and allows us to share our thoughts on the issues facing the sector generally.

The group also draws on our expertise in investment management and other technical resources from our fi nancial services department to understand the impact of industry changes and to provide clients with clear and appropriate advice. This integrated approach adds an extra dimension to the services we provide to our pension scheme clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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