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The Occupational Pensions Regulatory Authority (Opra) will publish an important new policy document in October, reports Serena Mitchell.

The updated Section 48 (1) – Reporting to Opra (Opra Note 1) will affect auditors and actuaries involved with the running of occupational pensions and represents a significant change by Opra towards a more risk-based, proactive regulatory approach.

Auditors and actuaries associated with pension schemes are statutory “whistleblowers” – required by law to report breaches of the Pensions Act 1995 to Opra.

Prior to this new policy coming into effect, auditors and actuaries have had a duty to report any breach of the Pensions Act by the trustees or employers of any pension scheme with which they are associated.

Whilst whistleblowing has proved successful, experience has shown that Opra’s initial policy resulted in the regulator receiving huge volumes of reports of often very minor matters.

Risk-Based Approach
The revised Opra Note 1(ON1) demonstrates Opra’s regulatory shift to a risk-based approach. Opra expects pension scheme trustees, with the help of their advisers, to take all steps to comply with the law. However, it does not want reports of isolated or inconsequential breaches that do not constitute a significant risk to members’ interests.

Using the new guidance, scheme actuaries and scheme auditors will be able to apply their professional judgement in considering the nature and impact of any breach they find, before deciding whether or not to make a report.

In practice this is likely to reduce the number of reports they make to Opra and limit reported breaches to those which could have a significant detrimental impact on members’ interests.

The new document will outline examples of:

• breaches a scheme auditor or scheme actuary may become aware of in carrying out their professional duties that Opra considers to be materially significant
• the circumstances which may make a breach materially significant
• factors Opra expects scheme auditors and scheme actuaries to consider when deciding whether to make a report in keeping with its new, more focused, regulatory approach.

Section 48(1) - Reporting to Opra (Opra Note 1) will be published on Opra’s website in October at www.opra.gov.uk.

ACCA members can subscribe to regular Opra news updates via e-mail by registering on Opra’s website. Subscribers will receive notification when the guidance is published, together with a link to the document online.

Alternatively, hard copies and requests for alternative formats can be ordered from Opra’s helpdesk by phoning 01273 627 600.

Serena Mitchell - Communications Officer, Opra

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