Pension Funds
Pension funds are set up by companies or other organizations:
(a) To administer the pension payable to retired employees and
(b) Ensure that funds are available to pay pensions even if the sponsoring organization goes into liquidation. The auditor’s duties involve:
- Examining the trust deed that set up the fund and ensuring that its provisions have been correctly carried out;
- Verifying that there is proper control over the transactions of the fund;
- Confirming the portfolio of investments. All changes must be authorised by trustee minutes and all income must be received;
- Confirm that the funds are enough to meet its future commitments. These are generally determined actuarially, if possible annually. Most of the schemes incorporate an undertaking by the sponsor to make excellent any deficiency.