Northern Trust has created a range of reports to assist its UK and Republic of Ireland pension fund clients in meeting new recommendations on how to value investments and present their financial statements.
The recommendations, known as the Statement of Recommended Practice (SORP), were revised by the UKs Pension Research Accountants Group (PRAG) in May 2007 to bring pension funds financial statements into line with some of the requirements of International Financial Reporting Standards issued in respect of investments. The changes to the SORP will come into place for accounting periods ending on or after 5 April 2008.
“International accounting standards that govern how companies need to disclose their pension funds investments on their balance sheet are becoming increasingly rigorous. Although SORP is specific to UK and Irish pension funds, we see this as part of an overall global shift in how pension funds handle their financial reports. A trend is developing where more and more pension funds around the world are adopting best practice guidelines in relation to how they present their financial statements,” says Peter Cherecwich, global head of asset servicing product development, Northern Trust.
“As custodian to approximately one third of the UKs top 200 pension schemes, and with over one third of the UKs local authority pension schemes as clients, it is our responsibility to be on top of accounting changes and how they affect reporting requirements, and to develop efficient and effective answers to our clients reporting complexities,” adds Peter Holman, head of the Institutional Investor Group within Northern Trusts asset servicing business.
To assist clients in getting to grips with the revised practices, Northern Trust organised three workshops two in London and one in Glasgow during February and March.
“It is really helpful that, as our custodian, Northern Trust is taking a leadership role on this issue. They have helped us to understand their interpretation of the new SORP and have developed reports that help us to meet the SORP requirements on time. The whole process has been very informative and efficient,” says Sandy Flight, chief exchequer officer, Tayside Superannuation Fund.