Audit Scotland Spring Budget Revision 2021/22
Letter from Chair to Convener of Finance and Public Administration Committee, 14 January 2022
Dear Kenneth
AUDIT SCOTLAND SPRING BUDGET REVISION 2021/22: IAS 19 – PENSION COSTS
At its meeting on 22 December 2021 the Commission took evidence from Audit Scotland on its Spring Budget Revision proposal. The Official Report is available online.
As with previous years, Audit Scotland seeks £6 million to meet increased non-cash pension accounting charges that will arise in 2021/22. They explain that figure has been calculated by the actuaries of the Lothian Pension Fund, which is the local government pension scheme of which Audit Scotland staff are members. The increased charge is driven by the continuing impact of low net discount rates used to value pension liabilities which increase future pension liability forecasts and in turn the estimates for in year pension service costs.
While Audit Scotland is not required to make cash payments for the sum identified, International Accounting Standards require that these notional costs are included and disclosed in Audit Scotland’s Annual Report and Accounts each year to reflect the full liability (both paid and accrued) of scheme membership.
I am writing to let you know that the Scottish Commission for Public Audit has agreed it is content with Audit Scotland’s Spring Budget Revision 2021/22 proposal for pension costs.
Yours sincerely
Colin Beattie MSP
Chair