‘( ) A scheme established under this section shall not be subject to the requirements to obtain audited accounts and an auditor’s statement about contributions under regulations made pursuant to section 41 of the Pensions Act 1995.
( ) The Secretary of State may make regulations requiring that the trustees of a scheme established under this section—
(a) make a declaration regarding the scheme systems and controls, and
(b) appoint a reporting accountant to review the scheme’s systems and controls and obtain a statement from such reporting accounting about their design and operation.’.
I hope this will not be as controversial an amendment, but it may take a while to explain it and in the course of explaining it, even I may begin to understand some of the finer points behind it. It is a bit tech-y, but here goes.
I take absolutely no credit for this, it is entirely sponsored and put forward by the Institute of Chartered Accountants in England and Wales, a body this Committee should hesitate to argue with on these matters. Amendment 157 seeks to set out exactly what kind of independent scrutiny the Government intends to have for the personal accounts scheme. We can all agree there has to be independent scrutiny and the non-accountants among us might assume that should just mean an annual audit of the traditional kind, which will ensure that the millions of new members in the scheme get their proper entitlement, that the contributions are correctly accounted for and broadly that the administration and financial probity of the whole thing is as it should be. The Institute of Chartered Accountants tells me it is
“very concerned that a national scheme such as the personal accounts scheme cannot be audited within the rules applying to occupational pension schemes” and that the scheme should instead be required to have what it calls
“a controls-based assurance review.”
I hope no-one intervenes to ask me what that is, but I hope I will be able to give a clue later on. I understand there has been some contact with officials on the technical aspects.
Mr. O'Brienindicated assent.