AUDITOR’S STATEMENT ABOUT CONTRIBUTIONS (PENSIONS EARMARKED SCHEME)
1.1 You have determined that an audit of the accounts of the scheme is not required as the scheme is an ‘ear-marked scheme’ within the meaning of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 (‘the Audited Accounts Regulations’). This letter therefore only deals with the scheme auditor’s statutory statement about contributions under the scheme. Should you instruct us to carry out an audit of the accounts of the scheme, a separate letter of engagement will be required.
2. RESPONSIBILITIES OF TRUSTEES AND SCHEME AUDITOR
2.1 The respective statutory duties of trustees and the scheme auditor in regard to financial statements and audit are contained in The Occupational Pension Schemes (Disclosure of Information) Regulations 1996 (‘The Disclosure Regulations’) and the Audited Accounts Regulations.
2.2 In summary, you are required under Regulation 6 of the Disclosure Regulations to make available an annual report of the scheme within seven months of the end of the scheme year. This report will principally comprise a trustees’ report setting out information specified in Schedule 3 to the Disclosure Regulations together with a Summary of Contributions, as described below, and an auditor’s statement about contributions as specified in the Audited Accounts Regulations.
2.3 Under section 87 of the Pensions Act 1995, you are responsible as trustees for ensuring that there is prepared, maintained and from time to time revised a schedule (the payment schedule) showing the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme and the dates on or before which such contributions are to be paid.
2.4 Trustees are responsible for maintaining books and records in accordance with regulations made under the Pension Schemes Act 1993 and Pensions Act 1995, including The Occupational Pension Schemes (Scheme Administration) Regulations 1996 (the Scheme Administration Regulations’). These should include written records of trustees’ meetings. Under Regulation 12 of the Scheme Administration Regulations, the trustees are responsible for keeping records in respect of contributions received in respect of any active member of the scheme.
2.5 You are also responsible for making available to us any of the scheme’s books and records and other information as may reasonably be required for the performance of our duties. For the purposes of our report, in particular, we will require a Summary of Contributions, for inclusion in the trustees’ report and approved by you, showing the aggregate amount paid to the scheme during the scheme year in respect of employer and members’ contributions (other than any member voluntary and any special contributions). Where your accounting records are kept by a third party, we shall require direct access to those records.
2.6 As Trustees you are also responsible for providing us with unrestricted access to persons responsible for the operation of, and other advisers to, the scheme from whom we determine it necessary to obtain evidence.
2.7 As Trustees you are responsible for notifying us if you become aware that under Section 27 of the Pensions Act 1995 any trustee of the scheme is connected with, or is an associate of Harris & Co which would render Harris & Co ineligible to act as auditor to the scheme.
2.8 We confirm that we are a Statutory Auditor, eligible to act as scheme auditor under the Scheme Administration Regulations. We confirm that we will notify you immediately we become aware of the existence of any conflict of interest to which we are subject in relation to the scheme.
2.9 Our duty as scheme auditor is to provide you with a statement about contributions under the scheme as required by Regulation 4 of the Audited Accounts Regulations. We shall report to you whether, in our opinion, the contributions payable to the scheme during the scheme year, as reported in the Summary of Contributions, have been paid, in all material respects, at least in accordance with the payment schedule maintained under section 87 of the Pensions Act 1995 or, where there is no such valid payment schedule in relation to all or part of the scheme year, whether in our opinion contributions have been paid in accordance with the scheme rules or contracts under which they were payable. If our opinion is negative or qualified, we shall state the reasons.
As noted above, our report will be made solely to the trustees, as a body, in accordance with [Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996]. Our audit work will be undertaken so that we might state to the trustees those matters we are required to state to them in an auditor’s report and for no other purpose. In those circumstances, to the fullest extent permitted by law, we will not accept or assume responsibility to anyone other than the pension scheme and the pension scheme trustees as a body, for our audit work, for the audit report, or for the opinions we form. The audit of the statement about contributions does not relieve you of your responsibilities.
2.10 In common with all accountancy and legal practices, we are required by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 to:
• have customer due diligence procedures for the identification of all clients;
• maintain appropriate records of identification evidence;
• report, in accordance with the relevant legislation and regulations, to the Serious Organised Crime Agency.
3. SCOPE OF OUR WORK
3.1 Our work will include examination, on a test basis, of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments. Our work will not constitute an audit of the financial transactions and net assets of the scheme and will be performed solely for the purposes of giving the required statement about contributions. We will plan and perform our work so as to obtain all the information and explanations which we consider necessary in order to give reasonable assurance that contributions payable as reported in the Summary of Contributions have been paid, in all material respects, at least in accordance with the payment schedule maintained by you under Section 87 of the Pensions Act 1995 or, where there is no such payment schedule in relation to all or part of the scheme year, contributions payable as reported in the Summary of Contributions have been paid in accordance with the scheme rules or contracts under which they were payable.
3.2 Our work is not designed to identify all weaknesses in the scheme’s systems but, if such weaknesses come to our attention during the course of our work, which we consider should be brought to your attention, we shall report them to you.
3.3 In order to carry out our duties as scheme auditor, we may need to consult with the scheme’s actuary or other actuarial adviser appointed by you. You hereby authorise us to communicate directly with such persons for the purposes of performing our duties as scheme auditor.
3.4 Information and explanations from the scheme’s personnel are an important part of our work. In order to avoid any misunderstanding and as part of our normal procedures, we may request you to provide written confirmation of certain oral representations which we have received from trustees or your personnel during the course of our work on matters we consider may have a material effect on the auditor’s statement about contributions.
3.5 The Scheme Administration Regulations also require employers and their auditors to furnish you on request with such information as is reasonably required for the performance of our duties as scheme auditor and the Regulations require you in turn to disclose such information to us. In this context, we may require written confirmation of certain matters from scheme employers and their auditors.
3.6 The Scheme Administration Regulations require any sponsoring employer to notify trustees of the occurrence of events relating to the employer which they believe to be of material significance to the trustees or managers or professional advisers. You hereby undertake to notify us of matters which may be relevant to the financial affairs of the scheme which have been notified to you by the sponsoring employers or have otherwise come to your attention.
3.7 The responsibility for safeguarding the assets of the scheme and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with yourselves. However, we shall endeavour to plan our work so that we have a reasonable expectation of detecting material misstatements in the Summary of Contributions (including those resulting from fraud, error, non-compliance with law or regulations or breaches of trust), but our examination should not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance or breach of trust as may exist.
4. REPORTING TO THE PENSIONS REGULATOR
4.1 We have a statutory duty under section 70 of the Pensions Act 2004 to report immediately to The Pensions Regulator (TPR) if we have reasonable cause to believe that there is or has been some failure to comply with any duty relevant to the administration of the scheme imposed by any enactment or rule of law on the trustees or managers, the employer, any professional adviser or any prescribed person acting in connection with the scheme and that the failure to comply is likely to be of material significance to TPR. We may have to make this report without your knowledge and consent and we cannot undertake to you to fetter this discretion in any manner.
4.2 Section 70 does not require us to undertake work for the sole purpose of identifying breaches likely to be of material significance to TPR. We shall fulfill our duty under this section in accordance with the requirements and guidance published by the Financial Reporting Council. In considering the need to make a report, we may decide to consult the scheme actuary. You hereby authorise us to communicate directly with the scheme actuary.
5.1 In order to promote effective two-way communication between us we set out below the expected form and timing of such communications.
• We shall contact you by telephone prior to each year-end for preliminary discussions concerning the audit. We will confirm in writing the matters discussed and any agreed action.
• We will arrange a meeting to discuss the forthcoming audit, including an overview of the planned scope and timing of the audit, prior to the expected start date. Again we will confirm in writing the matters discussed and any agreed action.
• We will arrange a meeting to discuss the significant findings from the audit following completing the on-site work. Again we will confirm in writing the matters discussed and any agreed action.
We may of course contact you on a more frequent and regular basis regarding both audit and other matters.
6. TERMINATION OF APPOINTMENT
6.1 Our appointment as scheme auditor may only be terminated, by you or by us, by notice in writing. The notice shall state the date with effect from which the appointment terminates. In the case of a notice of resignation given by us, the notice shall contain either:
• a statement specifying any circumstances connected with our resignation which, in our opinion, significantly affect the interests of the members or prospective members of, or beneficiaries under, the scheme; or
• a declaration that we know of no such circumstances.
6.2 In the case of a notice of termination given by you, we shall provide you with the aforementioned statement or declaration within 14 days of our receiving the written notice of termination of our appointment. You are required by the Scheme Administration Regulations to provide a copy of the statement or declaration to our successors or proposed successors as scheme auditors.
Updated December 2015