View more on these topics

A Consumer&#39s View

The latest report from Opra ought to stir the Government into some sort of action.

Once again, chairman John Hayes finds it necessary to reprimand pension scheme auditors and trustees for serious breaches of pension legislation. This should not be allowed to continue.

Hayes says: “Production of the accounts and the role of the auditor as statutory reporter help to shed light on any serious problems with the way schemes are being run and ensures that problems are put right before members&#39 benefits are put at risk.”

Quite so but the auditors appear to be turning a blind eye to many serious transgressions. During the course of 1999/2000, Opra reported 102 auditing firms on 224 separate occasions for failing to report late accounts in a timely way.

It would be interesting to know what action, if any, the accountants, regulators and professional organisations have taken.

With 102 auditors reported on 224 occasions, they are blatantly and consistently flouting the rules.

There were 3,152 new cases of late audited accounts during the course of the year.This is totally unacceptable.

This could be very serious for pensioners and the Government should, at the very least, warn of tougher action if the situation does not improve. If the Government wants us all to save for our old age, it should ensure our savings are not misappropriated. Has it learned nothing from the Maxwell affair?

Failure to produce accounts on time could very well indicate that contributions have not been paid by the employer, putting employees&#39 financial security in retirement at risk.

Indeed, the failure of employers to pay pension fund contributions on time is the biggest category of complaint to Opra.

Something is badly wrong. During the course of the year, Opra has referred 12 cases for criminal prosecution.

The total amount of fines imposed has nearly trebled since the previous year and is 10 times the 1997/98 figure. Opra has had to step in and appoint trustees for no less than 494 pension schemes, with some 13 trustees being disqualified from acting as pension scheme trustees.

Hayes observes: “The practical and, for the most part,simple steps needed tocomply with the law do not come naturally to many of the affected parties, in particular, smaller employers.

“This could also be said of some pension professionals, which is more worrying and this has been brought to the attention of the relevant professional bodies, trade associations and regulators.”

Clearly, if the accountancy regulators cannot discipline their members, then regulation should be transferred to another body. The situation is serious and unacceptable.

It is depressingly predictable to learn too that, “an ongoing issue for many trustees and auditors preparing pension scheme accounts has been the difficulty of obtaining necessary information from some insurers. This has been a source of concern to me for some time,” says Hayes.

Once again, life companies reveal their incompetence in getting even simple admin procedures sorted out.

But perhaps Hayes does have a remedy. “The legislative environment within which Opra operates is in a constant state of flux,” he says, referring to the Freedom of Information Bill, the Human Rights Act and the new Data Protection Act.

“These important pieces of legislation impact upon Opra&#39s activities and may mean we have to review our current practice of withholding names of cases where we have imposed a penalty.”

To name and shame those who are treating employees&#39 future financial security with such cavalier disregard would certainly be a step in the right direction. If an employer is not paying over the pension contributions on time, there are a lot of individuals such as shareholders, suppliers and potential new customers – not just past and present employees – who would be very interested in this information.

Recommended

Sun Life International extends a helping hand

Sun Life International is extending a helping hand to investors who are looking to prevent a visit from the taxman.The company&#39s new estate planning bond 2 is targeted at older investors with large estates who are looking to minimise their exposure to inheritance tax (IHT) by using offshore bonds. The product is a revamp of […]

Clerical Medical announces addition to Japanese Team

Clerical Medical announces an addition to its Japanese Equities Team. Stephen Adams, who has six years experience managing Japanese and Asia/Pacific markets, joins the team as of the end of July. He comes from Norwich Union where he helped manage its Japanese portfolio. Adams will replace Sharon Dodgson, who is leaving to join fund manager […]

Opra takes part in virtual question period

The Occupational Pensions Regulatory Authority is putting itself under the spotlight by taking part in a virtual question time on August 14.Opra chairman John Hayes, chief executive Caroline Instance and board member John Bowman will be available for questions relating to Opra’s fourth annual report between 2pm and 5pm at www.opra.gov.uk.The report shows pension cases […]

Legal & General is dipping its toes in the healthcare cash plan market for the first time with the Essentials Cash plan

Essentials is aimed at employees in small to medium sized companies who are looking for healthcare cover to complement what they receive from the National Health Service.The plan offers three levels of cash benefit, and the premiums increase to reflect this. The plan is underwritten by experienced cash plan firm HealthSure Group, which produces health […]

Brexit: what to expect in the aftermath

James Dowey, Chief economist & CIO In these very early stages following the “Leave” win any prognosis is by its nature highly tentative. It will be weeks before we are able to measure the acute impact of the result on the UK economy, and there are clearly no close historical parallels on which to base […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment