The National Association of Pension Funds is calling for changes to proposed financial reporting rules, warning they could impose significant costs on pension funds.
In January, the Accounting Standards Board published proposals to consolidate the UK’s generally accepted acc-ounting practice rules.
The proposals categorise pension funds as a financial institution which would require them to disclose details of financial instruments they use.
The NAPF says it is an “unnecessary” requirement for pension funds which would create major costs for big schemes with more complex investment and risk-mitigation strategies. It is concerned the disclosure requirements will make its financial reports difficult for scheme members to understand.
Policy director Darren Philp says: “Pension funds would face tough disclosure requirements starting from the wrong assumption that they are financial institutions like banks and insurers when, in fact, they are not.
“On top of that, they would face further disclosure req-uirements specific to them, which would raise the bar even higher.
“The Accounting Standards Board should remove pension funds from the category of financial institutions and eliminate the additional disclosure requirements. The existing disclosures are perfectly adequate as they are.”
The rules are planned to come into effect in January 2015.