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 Accounting Practice rules. The proposals categorise pension funds as a financial institution requiring 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 large schemes with more complex investment and risk-mitigation strategies.
The trade body is concerned the disclosure requirements will make its financial reports difficult for scheme members to understand.
NAPF 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 requirements 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.”
It is proposed the new rules will come into effect on January 1 2015.