Staff Writer
The Insurance Pensions Commission (Ipec) says it is reviewing the reporting requirements for pension funds and has come up with revised reporting requirements after the funds failed to comply with IAS 29—Financial Reporting in Hyperinflationary Economies.
In a circular to pension funds, the new guidelines will be effective from audited financial statements with the year ending 31 December 2025, but early adoption is recommended.
In 2022, Ipec issued circular 24 stating that only pension funds with adequate resources should comply with IAS 29 – Financial Reporting in Hyperinflationary Economies.
It said following the issuance of Circular 24 of 2022, the Commission has noted none-compliance in the audited financial statements submitted.
These include that pension funds received qualified opinions due to not reporting under IAS 29, as Circular 24 caused a deviation from IFRS Accounting Standards.
“Year-on-year comparisons are distorted because the historical figures for the comparative year are not adjusted for inflation, resulting in artificially low comparative numbers,” reads the circular.
Furthermore, Ipec said reported figures do not reflect the true economic reality, potentially disadvantaging the members, and the ratios used to assess industry performance are misstated.
There are also inconsistencies in disclosures, and the Commission has also noted departures from IAS 21—The Effects of Changes in Foreign Exchange Rates.
Ipec said the circular was issued in terms of Section 3(1) of the Insurance and Pensions Commission (Issuance of General Guidelines and Standards) Regulations, published in Statutory Instrument 69 of 2020, which empowers the Insurance and Pensions Commission to issue general guidelines and standards to regulate and monitor the management and administration of pensions and provident funds to ensure that they maintain set standards and ensure compliance with the Pensions and Provident Funds Act [Chapter 24:32]. 2.
In 2020, the Commission issued Circular 20 of 2020 requiring pension funds to adopt International Financial Reporting Standards (IFRS Accounting Standards).
