The guidance highlights that consideration of ‘going concern’ in the preparation of pension scheme financial statements requires greater focus due to COVID-19.

Also, auditors should be considering the impact of the COVID-19 pandemic on all aspects of the audit and communicating with pension scheme trustees about these as appropriate.

Some key points for trustees from the guidance are:

• The guide (which does not form part of the Pensions Statement of Recommended Practice), is relevant to occupational pension schemes, both Defined Benefit (DB) and Defined Contribution (DC).
• In relation to the duties of trustees and scheme advisers to report matters of material significance to The Pensions Regulator (TPR), these should be viewed taking into account TPR easements on COVID-19. [Section 4 of the Guide]
• The extent of the impact of the COVID-19 pandemic on the ‘control environment’ of a scheme will depend on its reporting period end date. [Section 8]
• In relation to the trustees’ report and Chair’s Statement, trustees should reflect on the impact of COVID-19 from a governance perspective. [Section 9]
• Consideration of going concern in the preparation of pension scheme financial statements requires greater focus due to COVID-19. The trustees remain responsible for undertaking the going concern assessment. Based on Dalriada’s experience of accounts that were due for sign off earlier this year, the scheme auditor will ask trustees to provide evidence to support the trustees’ going concern assessment immediately prior to the signing of the financial statements and auditor’s report. [Section 10]

• Accounting for scheme investments may be more challenging. Consideration of this and, if necessary, discussions between trustees and the auditor, should begin early in the accounts production process. [Section 11]
• For pension schemes with accounting periods ending on 31 December 2019, the COVID-19 pandemic in 2020 is likely to be a non-adjusting event. For subsequent reporting dates, schemes will need to judge how much of the impact of the COVID-19 pandemic should be considered to arise from non-adjusting events. [Section 11]
• In undertaking work in relation to the auditor’s statement about contributions, the auditor will need to know whether contributions to the scheme have been impacted by the reduction or suspension of deficit recovery contributions or future contributions; changes in pensionable earnings; and the furloughing of employees. [Section 13]

Comment

Annual reports and accounts for pension schemes still need to be produced within seven months of the scheme year end.

Reporting in the context of COVID-19 introduces additional complexities and allowance should be made for this in the usual production process for reports, financial statements and chair statement.

The guidance should also serve as a reminder a reminder to consider the impact of COVID-19 on member communications. For example, additional messaging in annual benefit statements.