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Pension plans are not being audited in a timely manner due to a shortage of auditors approved by the Financial Services Commission, FSC, for what is a specialised task, the top spokeswoman for the private pensions market has said.
The shortage has led to delays in filing updated reports to the regulator.
The FSC oversees the private pensions sector, which is valued at over $811 billion, but not public pensions, which is the remit of the National Insurance Scheme. The FSC’s mandate includes the approval and registration of approved superannuation funds and retirement schemes, the registration of trustees and responsible officers, and the licensing of administrators and investment managers in the private market.
Sanya Goffe, president of the Pension Industry Association of Jamaica, said the PIAJ and the FSC have been working through the auditor shortage issue and other problems for months.
There is said to be a shortage of auditors, generally, in Jamaica, but it’s even more acute when it boils down to the pensions sector, which requires specialised treatment.
“The problem isn’t just a lack of auditors; it’s that pension auditing is a specialised niche, and currently the bench is too thin,” said Goffe.
“We’ve pushed for pragmatic solutions, most of which have been accepted, and we’re expecting a forthcoming FSC advisory to provide welcome guidance,” she said.
The solutions being looked at to address the issue include adjusting the auditing plan year, so that the deadlines do not fall in the busy period of most listed companies, or waiving the requirement for the smaller plans to be audited, for example, where the plan membership is about 100 persons.
Up to last December, there were 819 pension plans in existence, of which 357 were classified as active.
Goffe explained to the Financial Gleaner that not enough auditors are approved to audit pension plans, and with so many plans needing to be audited, their operators are, in many cases, late in filing reports.
“This results in the plans not being compliant. [But] it doesn’t affect the benefits of members or the day-to-day operation of a plan,” she said.
The Financial Gleaner understands that there are about 70 approved pension fund auditors on the FSC’s list; however, it seems some may no longer be active, and a few are deceased.
Jamaica’s pool of auditors serves a wide spectrum, inclusive of listed companies, foundations, charities and other businesses.
With everyone “trying to use the same set of auditors, you find that pension funds often fall to the back of the queue” and their trustees end up not being able to meet the statutory timelines, Goffe said.
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