Five days ago I wrote about my surprise that Michael Izza had not commented on the potential
£40M pension deficit in the ICAEW's 2011 accounts:
"for reasons that are unclear he does not say a word about the pension deficit of £40M
that completely undermines that finances of the ICAEW, and is the tail
that is wagging the dog of the ICAEW's drive for new members via its
international "strategy".
How very odd that he doesn't mention it?
"
It seems that I am not alone in believing that such a significant potential shortfall deserved more prominence.
Kevin Reed is also of that view:
"MAKING FINANCIAL REPORTING more relevant and easier for to stakeholders to understand has been a long-running issue.
Let's face it - when things go wrong there will always stakeholders
up in arms as to why they'd not been able to predict such a terrible
moment by reading the accounting runes. Conversely, there will be some
clever sausage that looks in hindsight at the statements and figures to
highlight that the problem's been clear all along.
As a non-accountant of the most severe kind - but as a journo with an
interest in these issues - a couple of areas within the latest annual
reviews from ICAEW and CIMA left me slightly perplexed.
Firstly, the ICAEW's pension scheme financial position has been
valued by actuaries as in deficit of £40.1m at 31 December 2011,
compared with the triennial valuation measured in 2010 at a deficit of
£19.9m. This has the potential of forcing the ICAEW to stump up another
£5m and review its pension funding plan. A fall in gilt yields is the
main culprit behind the deficit's degradation.
Having traipsed up and down the pension schemes numbers - which
spread across four pages - I admit to originally missing out the figure,
which was included within the narrative section of the notes.
The deficit is mentioned twice within the institute's financial
statements - in the review pages and again in its notes to financial
statements. The ICAEW's summary of its position, the review, is online
where the deficit is again flagged up.
The ICAEW told me that it is satisfied about the coverage afforded to
the deficit, and its potential ramifications, within its year-end
statements. Note the ‘potential', as the valuation itself was a
‘desktop' valuation, or estimate.
While I don't pretend to be able to pull out the institute's various
pension scheme calculations through its statements of financial position
(or balance sheet as I'd know it), particularly as ICAEW stakeholders
are - let's face it - accountants, it still irks.
As a journo I'm not owed anything by the ICAEW. But maybe in the
context of its members, and its role in making reporting as clear as
possible, perhaps such an important ‘number' deserved more pronounced
presentation.
And while on the topic, it also seems strange that CIMA feels it
can't specifically reveal chief executive Charles Tilley's pay packet.
CIMA's annual review 2011 reveals its water consumption (3,400 cubic meters), but not the salaries of its senior management.
Some details are contained within the financial statements, but these
are anonymous. We know that the highest paid executive's dosh has moved
from the £210k-£220k bracket to £220k-£230k between 2010 and 2011. Is
that Tilley? Dunno, assume so. Has ‘his' pay gone up from £220k to
£220.1k, or £210k to £230k? A 100 quid or twenty grand? Dunno.
The average CIMA staff salary (wages + NI) fell to £33,349 from £36,224, with total staff numbers up to 426 from 369.
And of course, you're dying to know, the ICAEW does state their
executives' pay. Chief Michael Izza earned a total of £477,000 -
£372,000 in salary and £105,000 in ‘deferred variable pay', or
performance-related pay."
My thanks to Kevin Reed for his Tweet following my publication of this article:
"
@Goonerreed
£477,000 ...........bloody hell!
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