FTSE-100 companies this week slammed an actuary’s report on pensions costs disclosure and robustly defended their level of disclosure in reports and accounts.
Of the FTSE-100, BP, Lucas Varity and Sun Life & Provincial came in for most criticism for failing to include ‘clear disclosure of four key items which are crucial to understanding the figures’.
Ian Richardson, the group company treasurer of Sun life & Provincial Holdings, said the author of the report, Lane Clark & Peacock, only looked for particular areas of disclosure. ‘I would dispute it on two things,’ he said. ‘I think we made sure there was adequate disclosure on our accounts.’
BP said it had made no decision to mislead or to be less transparent and said it had attempted to verify Lane Clark & Peacock’s findings in the report. BP added: ‘Regrettably, Lane Clark & Peacock has not availed itself of this offer.’
The survey also highlighted the fact that ICI’s pension cost, as a proportion of pre-tax profits, was as high as 34%. An ICI spokesman said the company’s high figure reflects the large number of ex-employees prior to rationalisation and demergers. He said: ‘Against profits, it is not particularly brilliant.’
Richard Abramson and Bob Scott, partners at actuary Lane Clark & Peacock that drew up the firm’s fifth annual survey into FTSE-100 company pension reporting, also criticised the Accounting Standards Board for failure of SSAP 24 to promote disclosure.
The report said: ‘It has been evident for some time that SSAP 24 has failed in its objectives and a review of the standard is long overdue.’
Allan Cook, technical director of the ASB, said: ‘We think pensions is a priority subject. We’ve been held back by the international debate but we’re interested in pressing on now.’
Abolition of advance corporation tax credits was blamed for making pension provision more expensive to companies. Abramson said the ACT change ‘represents a major cost to UK pension schemes and the companies that pay for them.’
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