Financial Reports of Pension Schemes – the implementation of amendments to FRS102 to the pension SORP

14/03/2016

Since the pensions statement of recommended practice (SORP) was issued in November 2014 there have been a number of amendments to FRS102. Most are not relevant to pension schemes, but there are two changes which do impact on the SORP. The SORP will not be reissued, but the following guidance (issued by the Pensions Research Accounts Group (PRAG) in January 2016) should be read in conjunction with the SORP when preparing pension scheme accounts.

• The preparation note in the accounts should state whether or not the accounts have been prepared in accordance with FRS102. In rare cases where they have not, the wording should refer to ‘true and fair’ reporting rather than ‘fairly present’ as used in the original edition of FRS10.
• The definition of ‘related parties’ has been expanded to include an entity, or any member of a group of which it is a part, that provides key management personnel services to the reporting entity or its parent. Key management personnel are normally the trustees. In some cases, key management personnel services may be provided by a corporate entity, such as a trustee company, which will then fall to be a related party. Pension managers, investment managers, custodians and administrators are not normally considered to be key management personnel, however, since they are controlled and directed by the trustees.

For advice on the financial reports of pension schemes, please email Elizabeth Irvine