PHILIPSBURG:— The General Audit Chamber presented their report relating to the audit of the 2014 Financial Statements of the General Pension Fund (hereafter: APS) to Parliament and the Minister of Finance on July 29, 2016. The General Audit Chamber issued a disclaimer of opinion regarding the true and fair representation of the financial position as of December 31, 2014, and the 2014 financial results of the APS.
The General Audit Chamber notes that the APS’s participant administration was not sufficiently reliable in 2014. A reliable participant administration should be the core of the Fund’s functioning. After all, if the participant administration is not sufficiently reliable, the recorded provision, needed to ensure that future pensions can be fully paid, is also not adequately reliable. The General Audit Chamber, therefore, recommends that the APS carry out an integral audit regarding the accuracy and completeness of the participant administration prior to December 31, 2017.
In addition, the APS’s financial claim against Government increased by a substantial amount in 2014, totaling ANG 80,8 million (at the end of 2013 the claim was ANG 68,1 million). As a result, the APS had fewer funds available in 2014 to be used for potential investment. The General Audit Chamber recommends that the APS monitor the stipulations set forth in the “Debt Payment Basic Agreement” that it negotiated with Government in February of 2016, to ensure the settlement of the outstanding claim.
In their report, the General Audit Chamber also notes that at the end of 2014, the coverage ratio of the APS reached its lowest point since the start of the Fund in 2010. The coverage ratio was 97,6% at the end of 2014, whilst the ratio was 101,4% the year before. This means that at the end of 2014, the APS was not able to fully cover their future liabilities with their existing assets. The APS is urged to develop a realistic plan aimed at achieving a healthy coverage ratio of at least 105%.
According to the General Audit Chamber’s report, the APS operated, for the most part, in compliance with applicable laws and regulations. However, the report also mentions that for 2014, the APS collected a pension premium that was below the legally required rate. The APS collected a premium of 22% instead of the required 25%. As a result, until December 31, 2014, the APS failed to collect ANG 17,1 million that, potentially, could have been invested.
Finally, as part of the audit of the Financial Statements of the APS, the General Audit Chamber reviewed the Asset Liability Management study conducted in 2014 by the APS and found that the study met APS’ stated objectives. Specifically, the study provided the APS with insight as to whether the current pension scheme is still affordable and will remain affordable. However, the General Audit Chamber goes on to caution that an Asset Liability Management study cannot be used as the sole basis when making decisions about the future of the Fund.
The report is published in both English and Dutch and is available on the website of the General Audit Chamber (www.arsxm.org.
Source: St. Martin News Network
General Audit Chamber presented it report on APS audit.