78. The pension schemes that the SPPA administers or regulates are set out in statute and its work and responsibilities are summarised in its framework document as an agency. In addition, for each of the main schemes, the SPPA has established individual consultative advisory bodies with representatives from employers and trade unions affected. These act as a sounding board or may take a lead role concerning changes or potential changes to the main schemes.
79. The SPPA prepares and presents to the Scottish Parliament the annual accounts for the teachers’ and NHS schemes and similarly prepares and presents its own accounts as an agency. These accounts are subject to annual audit by Audit Scotland on behalf of the Auditor General for Scotland.
80. Audit Scotland’s 2009/10 audit of the SPPA resulted in a clear audit certificate and concluded that its internal governance arrangements were generally satisfactory. However, while overall key controls were operating effectively there were some areas of the SPPA’s activities with room for improvement. The auditor made recommendations about areas where control or governance should be improved. These included:
• The need to improve and provide greater assurance about data quality for pensions administration. There were issues including adjustments for missing records, multiple contracts and deferred members entitlement to refunds.
• Currently there is no qualified actuary on the board of the SPPA. The auditor highlighted the complexities of revaluation and pension administration, the imminent revaluations of both the teachers’ and NHS schemes and proposed reforms. The auditor recommended that the SPPA consider including an actuary in the next round of appointments to its board or seek actuarial expertise in another way.
81. The SPPA regularly benchmarks the cost of its operations against other similar organisations. In 2008 it compared the pensions administration cost of the SPPA with other pension schemes and found that the SPPA administration costs, at £12.99 a member a year, were lower than those of similar schemes in local government and the private sector.