Welplan Pensions Master Trust Controls Report (Extract Report)

Transcription

1 Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE 3000 for the period 1 September 2015 to 30 September 2016 Welplan Pensions Old Mansion House Eamont Bridge Penrith Cumbria CA10 2BX Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

2 Introduction This report is an Extract Report of the Master Trust Controls Report for Welplan Pensions (the Scheme). It highlights the control environment and internal controls for master trust services and related information technology controls operating for the 13 months (1) ended 30 September 2016 and reported in our AAF 02/07 Master Trust Controls Report signed 23 November The Scheme s Master Trust Controls Report, which contains full details of the Scheme s control objectives and procedures, will be provided to The Pensions Regulator. Members and participating employers will have details of the Scheme s controls made available to them. Welplan Pensions Trustee Company Limited, the independent Trustee Board of the Scheme is pleased to present this report setting out the control environment and internal controls for the Scheme s master trust services operating for the 13 month period ended 30 September Welplan Pensions was one of the first master trusts to commit in 2015 to the voluntary assurance framework recommended by the Pensions Regulator and our 2016 Controls Report is our second report. Welplan Pensions was formed by the Building Engineering Services Association (BESA, previously known as the HVCA), in 1988 as an industry-wide, multi-employer, trust-based occupational pension scheme for employers in the building and engineering services sector. Having subsequently expanded and now delivering to any business sector, this longstanding Master Trust continues to provide cost-effective, simple yet flexible, automatic enrolment and bespoke workplace pension solutions for employers of any size across their entire workforce - directly to employers or through their advisors. The Scheme s Administrator, Welplan Ltd, has more than 50 years of experience in providing large scale benefit schemes for a significant number of participating employers and their employees. The Trustee Board of Welplan Pensions, which is independent of both the BESA and Welplan, works alongside Welplan to govern the provision of good long term member outcomes by establishing quality features such as reviewing investment options, fund performance, performance of service providers, trustee knowledge and understanding, engagement with employers and members, whilst member charges are always kept to a minimum. Welplan Pensions has been awarded the Pensions and Lifetime Savings Association (PLSA) Pensions Quality Mark Ready status demonstrating that the Scheme meets best practice standards on governance, charges and communications. The Scheme Administrator has continued to hold ISO 9001:2008 certification since 2008 on the management of its systems and documentation having been subject to regular quality review and, if necessary, improvement. The Scheme has developed and performed evaluations to ascertain whether the components of internal control are present and functioning. This Master Trust report has been prepared having regard to the Institute of Chartered Accountants England and Wales (ICAEW) Technical Release 07/14 Assurance Reporting on Master Trusts (Master Trust Supplement to ICAEW AAF 02/07) and the Committee of Sponsoring Organisations of the Treadway Commission (COSO) framework. The Trustee Board of Welplan Pensions appointed an ICAEW reporting accountant, Assure UK, to provide independent assurance on the Scheme s control procedures. A statement on this independent assurance is given by the Reporting Accountants in Section 2 of this report. We are pleased to note that Assure UK had no exceptions to report and have concluded in their assurance report that all controls were suitably designed, described and operated effectively for the 13 month period ended 30 September 2016.It demonstrates the Trustee Board s intention to deliver fit-for-purpose, easy to administer, well communicated and governed DC pension provision to employers for their employees. Our control environment and the AAF 02/07 Master Trust control objectives are described in Sections 3 and 5 of this extract report of the Scheme s Master Trust Controls Report. Chair of the Trustee Board of Welplan Pensions 23 November 2016 Note 1. The 13 month audit period for 2015/16 reflects the Trustee Board s decision to rebase the annual cycle to 30 September. Welplan Pensions Master Trust Report (Extract Report) in accordance with AAF 02/07 and ISAE September

3 Contents Introduction 1 1. Statement by the Trustee Board of Welplan Pensions Report by the Reporting Accountants 4 3. Business Overview and Control Environment Summary of Control Objectives Control Objectives and Control Procedures 15 Disclaimer If you are receiving this Report in your capacity as a prospective new customer (i.e. post 30 September 2016) of Welplan Pensions then your attention is drawn to the Disclaimer letter at the back of this Report which outlines the basis on which you have received this Report and the Reporting Accountants Assurance Report therein. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

4 1. Statement by the Trustee Board of Welplan Pensions As Trustee Directors we are responsible for the identification of control objectives relating to the provision of Master Trust services by Welplan Pensions (Scheme) and the design, implementation and operation of controls to provide reasonable assurance that the control objectives are achieved. In carrying out those responsibilities we have regard not only to the interests of employers (who have entrusted their employees DC contributions to the Master Trust, or are considering doing so) and members of the Master Trust but also to the needs of the trust business and the general effectiveness and efficiency of the relevant operations. We have evaluated the effectiveness of Welplan Pensions control procedures having regard to ICAEW s Technical Release AAF 02/07 including its Master Trusts Supplement and the control objectives set out therein, and fairness of the description and the design suitability of the Scheme s controls of Master Trust services having regard to the International Standard on Assurance Engagements ISAE 3000 Revised (ISAE 3000), issued by the International Auditing and Assurance Standards Board. We confirm that: A. The accompanying description at section 5 fairly presents the control procedures that relate to the control objectives referred to above for Welplan Pensions master trust services for the 13 month period ended 30 September In addition to the control objectives specified in AAF 02/07, the criteria used in making this statement were that the accompanying description: (i) presents how the services were designed and implemented, including: the types of services provided, including, as appropriate, the nature of transactions processed; the procedures, both automated and manual, by which customer transactions were initiated, recorded and processed; the accounting records and related data that were maintained, reported and corrected as necessary; the means by which the administration systems captured and addressed significant events and conditions, other than customer transactions; the security, availability and recovery characteristics of information technology systems and other aspects of our control environment, risk assessment process, monitoring and information and communication systems, that were relevant to our control activities; and (ii) does not omit or distort information relevant to the scope of the services being described, while acknowledging that the description is prepared to meet the common needs of a broad range of customers and their auditors and may not, therefore, include every aspect of the services that each individual customer may consider important in its own particular environment. B. The control procedures related to the control objectives stated in the accompanying description were suitably designed for the 13 month period ended 30 September The criteria used in making this statement were that: (i) the risks that threatened achievement of the control objectives stated in the description were identified; (ii) the specified controls would, if operated as described, provide reasonable assurance that those risks did not prevent the stated control objectives from being achieved; and (iii) the controls were applied as designed, including manual controls which were applied by individuals who have the appropriate competence and authority for the 13 month period ended 30 September C. The control procedures described were operating with sufficient effectiveness to provide reasonable assurance that the related control objectives were achieved during the specified period from 1 September 2015 to 30 September Chair of the Trustee Board of Welplan Pensions Signed on behalf of the Trustee Directors of Welplan Pensions Date: 23 November 2016 Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

5 2. Report by the Reporting Accountants Reporting accountants assurance report on the governance and administration control procedures of Master Trusts to the Trustee Board of Welplan Pensions (Scheme) Use of report Our report, subject to the permitted disclosures set out below, is made solely for the use of the Trustee Board (the Trustee), and is solely for the purpose of reporting on the control procedures of the Scheme, in accordance with our terms of engagement letter dated 25 October 2016 and attached in the appendix. Our work has been undertaken so that we might report to the Trustee those matters that we have agreed to state to it in our report and for no other purpose. We permit the disclosure of our report, in full only to verify to the recipient that a report by reporting accountants has been commissioned by the Trustee and issued in connection with the control procedures of Welplan Pensions without assuming or accepting any responsibility or liability to the recipient on our part. To the fullest extent permitted by law, we do not and will not accept or assume responsibility to anyone other than the Trustee as a body for our work, for our report or for the opinions we have formed. Scope We have been engaged to report on the Trustee s description and operation of its governance and administration control procedures for the 13 month period ended 30 September Trustee s responsibilities The Trustee s responsibilities and statement are set out on section 1 of the report. The control objectives stated in the description include those control objectives set out in the Master Trusts Supplement to AAF 02/07 that are considered relevant by the Trustee. Our independence and quality control We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. The firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Our responsibilities Our responsibility is to form an independent opinion, based on the work carried out in relation to the control procedures of Welplan Pensions (the Scheme) as described in section 5 of the report and report this to you. We conducted our engagement in accordance with International Standard on Assurance Engagements ISAE 3000 Revised (ISAE 3000) and with ICAEW Technical Release AAF 02/07 including its Master Trusts Supplement. ISAE 3000 and AAF 02/07 require, among other things, that we comply with ethical and other professional requirements. We plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the description is fairly presented and the control procedures are suitably designed and operating effectively. The criteria against which the control procedures were evaluated are the control objectives developed for Master Trusts as set out within the Master Trusts Supplement to AAF 02/07 and specified by the Trustee as control objectives to be applied for the purpose of governance and administration. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

6 Our work involved performing procedures to obtain evidence about the presentation of the Trustee s description of the governance and administration control procedures and the design and operation effectiveness of those control procedures. Our procedures include assessing the risks that the description is not fairly presented, and that the controls procedures were not suitably designed. Our procedures also included testing the operating effectiveness of those control procedures that we considered necessary to obtain reasonable assurance that the control objectives stated in the description were achieved. An assurance engagement of this type also included evaluating the overall presentation of the description, the suitability of the control objectives stated therein. Inherent limitations The Trustee s description of control procedures was prepared to meet the common needs of a broad range of users and may not, therefore, include every aspect of control procedures that may be relevant to each employer company or member of the Scheme. Also, because of their nature, control procedures may not prevent or detect and correct all errors or omissions in performing governance or administration activities. Our opinion is based on historical information. The projection of any evaluation of the fairness of the presentation of the description, or opinion about the suitability of the design or operating effectiveness of the control procedures to future periods would be inappropriate. Opinion In our opinion, in all material respects: (i) (ii) Section 5 of the Trustee s report fairly presents the control procedures that relate to the control objectives referred to above which were in place throughout the period 1 September 2015 to 30 September 2016; The control procedures described in section 5 of the Trustee s report were suitably designed to provide reasonable, but not absolute, assurance that the specified control objectives would have been achieved if the described control procedures operated effectively throughout the period; and (iii) The control procedures established by the Trustee that were tested were operating with sufficient effectiveness to provide reasonable but not absolute assurance that the related control objectives were achieved throughout the period 1 September 2015 to 30 September Assure UK Chartered Accountants London 23 November 2016 Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

7 3. Business Overview and Control Environment Business Overview Our Services Welplan Ltd, a wholly-owned subsidiary of the Building Engineering Services Association, administers pensions and employee benefit schemes for employers in a variety of business sectors from its office in Penrith, Cumbria. With more than 50 years of experience working with customers of all sizes, Welplan has the flexibility to provide bespoke packages to meet the varied needs of individual employers or employer groups. Welplan Pensions was set up in 1988 as an industry-wide, multi-employer, trust-based occupational pension scheme for employees in the building and engineering services sector. Now offering pension administration to every business sector, this longstanding Master Trust has a strong track record of providing cost-effective, simple yet flexible, automatic enrolment and bespoke workplace pension solutions for employers of any size across their entire workforce - directly to employers or through their advisors. The Scheme currently has approximately 470 participating employers and c 33,500 members of which c 8,000 are deferred. How Welplan Pensions is structured The Trustee Directors of Welplan Pensions Trustee Company Limited, the independent Trustee Board of Welplan Pensions, provide robust governance to ensure that decisions on matters such as charges, investment strategy, communication and administration are taken with the best interests of members in mind at all times. The Trustee Board has appointed Legal and General Assurance (Pensions Management) Limited to manage members investment funds in accordance with the Scheme s Statement of Investment Principles. Professional advisors appointed for investment, legal and financial reporting matters report to the Trustee Board at intervals determined through the Trustee Board s identification and assessment of risks. The reporting framework for professional advisors and reviewing their services is managed using the Trustee Board s Resource Planner. Welplan Ltd (Welplan), the Scheme s Administrator, carries out the Scheme s day to day management of data and operations. By listening to employers and members views and, with the aim of meeting their expectations regarding simplicity, flexibility and cost-effectiveness, the Trustee Board continues to oversee Welplan s deployment of new technology and IT governance to enhance processes and controls over pension administration and communication. This, together with the Trustee Board s further development of the Scheme s reporting framework, enables the Trustee Board to be responsive and ensures that employers and members Scheme experiences are straightforward. Innovation and Improvement Welplan Pensions is committed to continuous improvement of efficient, cost-effective pensions administration for employers, and appropriate, clearly communicated investment choice for members. During 2016 we released our latest, now fully online system enabling employers or their agents to register with the scheme online, sign the Agreement to Participate online, assess their workforce, transfer contributions data, and set up Direct Debits. The end result is a simple process of dragging and dropping reports securely online, with the system doing the rest, including reconciliation of contributions and straight-through investment. This approach will allow the Scheme to keep ongoing costs within the Annual Management Charge, and maintain a No Fees policy for employers. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

8 Member outcomes are fundamental to pensions savings, so the Trustee Directors have responded to pensions flexibilities by widening the options to members during their accumulation phase, at the same time keeping choices simple, flexible, and pertinent. Income Drawdown is available to members via a monthly payroll using the UFPLS option (Uncrystallised Funds Pension Lump Sum), which has proved to be appropriate to many members who are accessing their Long Term Savings. The Trustee Board of Welplan Pensions Colin Richardson Trustee Director (Chair) has 26 years in pensions work including actuarial, consultancy and trusteeship. He acts as independent trustee on several DB and DC pension schemes both large and small including 4 DC Master Trusts and also is a member of the Internal Governance Committees for two leading workplace pension providers. Colin chairs the PTL Governance Advisory Arrangement for pension providers which provides governance for 12 further pension providers. He is formerly a Director at KPMG and a partner at Barnett Waddingham with subsequent senior positions at JLT and Buck Consultants. Colin also has advised upon auto-enrolment design and implementation, has significant project management experience relating to pension arrangements and has delivered numerous Trustee training courses and spoken at many pensions industry events. Colin is a former chair of the Association of Consulting Actuaries (ACA) Investment Committee and a former member of the ACA Local Government Committee and NAPF Yorkshire Committee. Bruce Kirton Trustee Director is the Chief Executive of Welplan Ltd and has been a directortrustee of Welplan Pensions since 1999, firstly as a director of long-standing corporate trustee Welplan Ltd and, since April 2015, as a member of the new independent trustee board. Bruce joined Welplan in 1991 and has extensive trustee experience of trust-based employee benefit schemes, including both defined benefit and defined contribution pension arrangements. Cedric Sloan Trustee Director graduated from Liverpool University in 1968 with an honours degree in electrical engineering and was then commissioned in to the Royal Engineers. His Army career of 30 years covered a variety of command and staff appointments across the world. He gained a Masters degree in defence administration from Cranfield University before retiring as a lieutenant colonel to join the Federation of Environmental Trade Associations (FETA) as its Director General. He retired from this second career in 2014 and became an independent trustee for Welplan Pensions in Richard Read Trustee Director has worked in the Building Services Industry for 36 years. Starting as an Indentured Electrical Apprentice and finally retiring as Chief Executive of a major Building Services company. He has continued to put his business and commercial experience to use as a non-executive director of Welplan Ltd. He has also a keen interest in pension issues being a Trustee Director of Welplan Pensions and a Member Nominated Trustee of the Lorne Stewart Pension Scheme. Andrew Ramsay Trustee Director has over 10 years of experience in the field of pensions, having held employer nominated and member nominated trustee positions in various schemes. Formerly chief executive of the Chartered Institution of Building Services Engineers and of the Engineering Council, he now practices as a freelance advisor to charities and professional bodies on governance issues. He is a chartered secretary and a chartered engineer. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

9 Gillian McKillop - Secretary to the Trustee Board joined Guardian Royal Exchange in Edinburgh in 1986 with an accountancy degree and began training towards Associateship of the Chartered Insurance Institute (CII). She joined Welplan in 1992 and, whilst managing the administration of a variety of Welplan s multi-employer pension and employee benefit schemes, qualified as a Fellow of the CII. In her dedicated role as Secretary to the Trustee Board, Gillian draws on 30 years of pensions experience and knowledge to support to the independent Trustee Board, ensuring that reporting from service providers is monitored and developed as necessary and that Board decisions are actioned. Welplan Pensions - Senior Management Team Trustee Board Management and Governance To enable robust governance standards to be maintained the Trustee Board meets quarterly and holds interim meetings as required from time to time to consider and review on-going projects and to carry out necessary governance matters. The Trustee Board s Risk Register and Resource Planner are applied and updated at each quarterly meeting as the Trustee Board identify and assess risks in relation to Scheme objectives and plan the ongoing management of these risks. To monitor internal controls and to evaluate and communicate any internal control deficiencies in a timely manner to the parties responsible for taking corrective action including senior management and directors, the Trustee Board has developed a management reporting framework to be carried out between quarterly meetings. Monthly management information is provided by the Scheme Administration manager to the Secretary to the Trustee Board who assesses the information and reports on it quarterly to the Trustee Board. Where necessary, matters may be escalated by the Secretary to the Trustee Board between quarterly Trustee Board meetings: - to the CEO of Welplan; through to the Trustee Board. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

10 Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

11 Staff Policies and Practices (Welplan) Welplan has a framework of HR policies and guidelines to ensure compliance with legal and ethical requirements and expected company behaviours. Welplan recognises the value of the staff who deliver the Scheme and currently holds the Silver Standard Investors in People award. Staff are expected to maintain the system and procedural compliance which is integral to the ISO 9001:2008 certification in Quality Management Systems held by Welplan since Annual external reviews of staff policies and practices are held to maintain certification. In addition to professional body Continuing Professional Development requirements, Welplan recognises the benefits of providing structured and unstructured opportunities for staff development across the business. There are regular opportunities to participate in Institute of Leadership and Management training and qualifications and a structured process of Personal Development Reviews seeks to identify individual training opportunities. Staff regularly participate in industry briefings and conferences as well as being involved in pensions industry association committees. As a data intensive business, Welplan recognises its responsibilities in terms of data and financial protection and fully complies with statutory and industry requirements. Control Environment Risk Management and Internal Control Welplan understands the importance of protecting the interests of members and compliance with industry and statutory requirements. ISO 9001:2008 certification ensures that staff recognise the importance of procedures and a consistent approach to data handling to ensure consistent delivery of a high quality service. Regular internal auditing against ISO 9001:2008 requirements ensures that all staff are aware of objectives and responsibilities associated with procedures and controls. Six-monthly meetings are held between the Director of People and Culture responsible for ISO 9001:2008 and the Head of Pensions and Employee Benefits in charge of pension administration. The purpose of these meetings is to discuss any trends or patterns arising, to support Welplan s ethos for continuous improvement and to assess current and new risks. Key points arising from these reviews are reported to Senior Management. Welplan seeks to obtain formal feedback from members and their employers about the quality of the services provided to them and this information is used to adapt internal controls as necessary. Regular review of the Trustee Board s Risk Register aims to identify the need for any changes to procedures and controls. At Welplan, a variety of accounting and internal controls are designed to prevent and detect fraud. These include restricted access to buildings, pension systems and Scheme databases; segregation of duties between pension administration and finance staff; investment and payments authorisation levels; monthly, independently reviewed bank reconciliations; monitoring of contribution receipts; reconciliation of pension system investment records with investment management holdings; data update and amendment controls; review of member-requested transfers-out for potential pension liberation fraud. Fraud risk mitigation and associated controls are also considered as part of internal audit reviews. Welplan has regular dialogue with The Pensions Regulator to provide data and feedback on relevant Scheme control matters and information about the Scheme s internal control mechanisms. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

12 Complementary Control Procedures of Participating Employers It is not feasible for the control objectives relating to pension administration services to be achieved solely by Welplan. For participating employers to rely on the controls reported at Section 5, they are each expected to follow processes and procedures as advised by the Administrator and maintain their own internal controls to ensure: member data and contributions are provided as instructed and on a complete, accurate and timely basis; changes to individuals authorised to instruct Welplan are communicated in writing and on a timely basis; security controls to protect member data are in place; contingency plans have been developed to ensure that information can be consistently communicated to Welplan in the event of a system error or other disruption. Business Continuity and Disaster Recovery Business Continuity and Disaster Recovery Plans (which include testing Business Continuity location facilities) are maintained by Welplan, are tested by regular process walk-throughs and associated reports are provided to the Trustee Board. Information Security The Trustee Board understands that the protection of Scheme data is critical and has established appropriate controls to ensure that information security is monitored and reviewed. When member data is received via it is contained within encrypted attachments. Data is submitted by participating employers via https secure connections. Enterprise class software provides anti-virus and anti-malware protection which is updated daily. Microsoft tools manage security and other updates to servers and desktop systems. Access to Welplan s offices, server and data communications rooms and software applications is controlled by a range of electronic and username/password protection managed by Welplan and third party system providers. Access to back-up data is restricted and is stored off-site in secure locations. Welplan regularly reports to the Trustee Board setting out the Scheme s security procedures and processes. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

13 4. Summary of Control Objectives SAFETY OF ASSETS AND RECORDS Commercial and business risks 1. Discontinuance plans, which address how member assets or entitlements are safeguarded in the event of the master trust or any key service provider failing, are documented, approved and maintained. Business and disaster recovery 2. Data and systems are backed up regularly, retained offsite and regularly tested for recoverability. Business and information systems recovery plans are documented, approved, tested and maintained. 3. The capacity of an administration system to take on new business is assessed, approved and regularly monitored. 4. New business take-ons are properly established in accordance with the master trust s rules and contractual arrangements. Data quality and security 5. Member data is complete and accurate and is subject to regular data evaluation. Data transmissions are secure and appropriate measures are implemented to counter the threat from malicious electronic attack. 6. Physical and logical access to computer systems, and member and master trust records and data, is restricted to authorised persons. 7. IT equipment is maintained in a controlled environment and the maintenance and development of systems, applications and software is authorised, tested approved and implemented. Protection of assets 8. Member assets or entitlements are safeguarded from loss, misappropriation and unauthorised use in accordance with a defined policy. 9. Cash is safeguarded and all payments are suitably authorised and controlled. 10. Financial protection available to members in the event of default is assessed and documented, and communicated to employers and members on request. 11. Investment decisions relating to the selection of investments on regulated markets and unregulated investments are researched, authorised and monitored. ASSESSING VALUE Assessment of value for money 12. A value for money review is undertaken and this review is documented, approved and findings actioned. Communication of costs and charges 13. A complete and accurate list of the types of costs and charges incurred by members and employers is documented, monitored and approved. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

14 14. Disclosure of information on costs and charges borne by members is provided to employers at the point of selection and is complete and accurate. 15. Disclosure of information to members of costs and charges (rates (%) and amounts ( )) are complete and accurate. ASSESSMENT OF INVESTMENT OPTIONS Appropriateness of the default strategies 16. The design and ongoing suitability of the default strategies is regularly reviewed and monitored. This review is documented and approved. 17. The performance of the default strategies and funds within the default strategies are regularly reviewed and monitored. This review is documented and approved. Appropriateness of the other investment options (i.e., non-default strategy investment options) 18. The range and risk profile of other investment options are documented, approved and regularly reviewed for suitability. This review is documented. 19. The performance of other investments options is regularly reviewed against relevant investment objectives and (where available) industry benchmarks. This review is documented and approved. Identification of investment objectives and assessment against them 20. A complete and accurate description of all investment options is maintained and approved. 21. A Statement of Investment Principles (SIP) is documented, approved and regularly reviewed. PEOPLE Conflicts of interest 22. Conflicts of interest are identified, recorded and managed in accordance with a defined policy which is regularly reviewed and approved. Fit and proper trustees 23. Fitness and propriety requirements are recorded and managed in accordance with a defined policy which is regularly reviewed and approved. 24. The fitness and propriety of trustees is regularly reviewed and monitored prior to appointment and thereafter. This review is documented and approved. 25. Trustee skills and knowledge are managed and maintained in accordance with an approved training programme. The training programme is regularly reviewed and updated. GOVERNANCE Resource planning 26. A plan is maintained and regularly reviewed to ensure that resources are properly allocated. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

15 Scheme management 27. Roles, responsibilities and duties of all trustees, advisers and service providers are documented, approved and regularly reviewed. 28. Activities undertaken by all scheme advisers and service providers are properly managed and subject to regular performance reviews which are documented and approved. Internal control framework 29. A risk management framework is established to identify, manage and monitor significant operational, financial, regulatory and compliance risks. Core scheme transactions 30. Contributions, benefit payments, investment transactions and calculations and related income and expenditure are completely and accurately processed in a timely manner and recorded in the proper period. 31. Contributions are invested in accordance with member instructions or the default policy. 32. Transaction errors are rectified and members are treated fairly as a result of that rectification. Receipt of contributions 33. Late and inaccurate contributions are pursued and resolved. Retirement process 34. Retirements are managed in accordance with a documented process which is regularly reviewed and approved. 35. Retirement products selected by members are monitored and the range of retirement products made available is reviewed regularly for ongoing suitability. 36. Members are regularly made aware of their investment choices, the importance of reviewing the suitability of their investment choices and that their level of contributions is a key factor in determining the overall size of their pension fund. Communications 37. Scheme communications are accurate, clear and understandable and are produced in accordance with a documented communications plan. The plan is regularly reviewed and monitored. 38. Communications contain information to support the decisions members need to make at retirement. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

16 5. Control Objectives and Control Procedures This report is an Extract Report of the Master Trust Controls Report for Welplan Pensions (the Scheme). It highlights (at Section 3) the control environment and internal controls for master trust services, and related information technology controls, operating for the 13 month period to 30 September 2016, and reported in our AAF 02/07 Master Trust Controls Report signed 23 November The Scheme s Master Trust Controls Report, which contains full details of the Scheme s control objectives and procedures, will be provided to The Pensions Regulator. Members and participating employers will have details of the Scheme s controls made available to them. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September

17 Disclaimer Important Notice To be read in Conjunction with Confidential AAF 02/ Report on Internal Controls of Welplan Pensions A report on the internal controls for Welplan Pensions ( the Scheme ) prepared by the Trustee Board of Welplan Pensions ( Trustee Board ) for the 13 month period ended 30 September 2016 ( 2016 Control Report ) has been prepared principally for the purposes of providing information to organisations who were customers at 30 September The 2016 Control Report is appended to an assurance report ( the Reporting Accountants Report ) on master trust controls prepared by Assure (UK) Limited ( the Reporting Accountants ) solely for the Trustee Board. The Reporting Accountants Report has been prepared on a confidential basis in accordance with terms of engagement set out in Assure (UK) Limited s engagement letter dated 25 October Following a request by the Trustee Board, the Reporting Accountants have exceptionally agreed to the posting of the Reporting Accountants Report on this website, on the basis set out in this Notice, to enable readers to verify that a report relating to the master trust controls of Welplan Pensions and prepared in accordance with the International Standard on Assurance Engagements 3000 (Revised) Assurance engagements other than audits or reviews of historical financial information issued by the International Auditing and Assurance Standards Board ( ISAE 3000 ) and Technical Release TECH 07/14 AAF Assurance reporting on master trusts - Master Trust Supplement to ICAEW AAF 02/07 ( AAF 02/07 ) has been commissioned by the Trustee Board and issued by the Reporting Accountants, subject to the remaining paragraphs of this Notice, to which readers attention is drawn. The Reporting Accountants Report should not be regarded as suitable to be used or relied on by any reader wishing to acquire any rights against the Reporting Accountants other than Trustee Board (as a body) for any purpose or in any context. In consenting to the posting of the Reporting Accountants Report on this website, the Reporting Accountants do not accept or assume any responsibility to any readers other than the Trustee Board (as a body) in respect of the Reporting Accountants work for the Trustee Board, the Reporting Accountants Report, or any opinions that the Reporting Accountants may have formed and, to the fullest extent permitted by law, the Reporting Accountants will accept no liability in respect of any such matters to any readers other than the Trustee Board. Should any readers other than the Trustee Board choose to rely on the Reporting Accountants Report, they will do so at their own risk. The 2016 Control Report and the Reporting Accountants Report contained within it are not to be copied in whole or in part in any document and may not be distributed without our prior written permission. To ensure that prospective customers have a clear understanding of the terms under which the Reporting Accountants Report is being provided to them, a copy of this Disclaimer should accompany the Reporting Accountants Report. By accessing this document you agree to accept these terms. Welplan Pensions Master Trust Controls Report (Extract Report) in accordance with AAF 02/07 and ISAE September