July 26, 2005
Pension Funds and Sarbanes-Oxley - Neglected or Not?
As a risk based approaches are further refined in Sarbanes-Oxley compliance efforts, experts are finding that a huge risk area: Pension Funds, are being largely ignored. Interesting since this is such a huge item for most public companies. Sounds like more attention to real risks and not as much to largely well controlled IT processes is in order.
An article on this topic is here:
"A Neglected Area of Sarbanes-Oxley Compliance
Managing Compliance Standards, July 21, 2005
With Wayne H. Miller, CEO of Denali Fiduciary Management, a firm that consults with industry on retirement plan governance. Miler co-authored the Fiduciary Assistance and Compliance Systems (FACS©) Program, an ERISA (Employee Retirement Income Security Act of 1974) trust governance guidebook and the on-line ERISA fiduciary governance training available through Financial Executives International (FEI).
Question: Has Sarbanes-Oxley increased the responsibility of corporate executives and board members with respect to the management of pension funds?
Miller: Internal controls in pension funds were always supposed to be there. What Sarbanes-Oxley has done is to make the penalties draconian for attesting to internal controls when they're not there. Under ERISA [the Employee Retirement Income Security Act of 1974], there is a statutory requirement that executives attest that the plan is being operated in accordance with all applicable laws. I'm not entirely sure why, but I am finding that when consultants come in, they don't do a whole lot with retirement fund internal controls. I've spoken to corporate treasurers who have told me they passed their Sarbanes-Oxley audits with flying colors, but the consultants didn't even look at the retirement plans. I've also seen a fairly in depth report on a Fortune 1000 company that described what the Sarbanes-Oxley consultant did, and it turns out they didn't do much as far as the retirement plan is concerned.
There has also always been a statutory duty under ERISA for board members to watch over the people managing pension funds. Up until a year ago, I've never seen a board do this well. Boards historically haven't drilled down into the details of fund management, although one could argue that is not their responsibility. With $6 trillion under the private pension umbrella, and with increasing problems cropping up in the private pension system in this country, it behooves board members to drill down to make sure companies are getting it done right." For the complete article, click here.
To see how your company can effectively and rapidly accomplish your Sarbanes-Oxley compliance efforts, see www.issuescentral.com to learn more about the Compliance Playbook(tm) or call toll free today 800.410.6681 ext 112.
An article on this topic is here:
"A Neglected Area of Sarbanes-Oxley Compliance
Managing Compliance Standards, July 21, 2005
With Wayne H. Miller, CEO of Denali Fiduciary Management, a firm that consults with industry on retirement plan governance. Miler co-authored the Fiduciary Assistance and Compliance Systems (FACS©) Program, an ERISA (Employee Retirement Income Security Act of 1974) trust governance guidebook and the on-line ERISA fiduciary governance training available through Financial Executives International (FEI).
Question: Has Sarbanes-Oxley increased the responsibility of corporate executives and board members with respect to the management of pension funds?
Miller: Internal controls in pension funds were always supposed to be there. What Sarbanes-Oxley has done is to make the penalties draconian for attesting to internal controls when they're not there. Under ERISA [the Employee Retirement Income Security Act of 1974], there is a statutory requirement that executives attest that the plan is being operated in accordance with all applicable laws. I'm not entirely sure why, but I am finding that when consultants come in, they don't do a whole lot with retirement fund internal controls. I've spoken to corporate treasurers who have told me they passed their Sarbanes-Oxley audits with flying colors, but the consultants didn't even look at the retirement plans. I've also seen a fairly in depth report on a Fortune 1000 company that described what the Sarbanes-Oxley consultant did, and it turns out they didn't do much as far as the retirement plan is concerned.
There has also always been a statutory duty under ERISA for board members to watch over the people managing pension funds. Up until a year ago, I've never seen a board do this well. Boards historically haven't drilled down into the details of fund management, although one could argue that is not their responsibility. With $6 trillion under the private pension umbrella, and with increasing problems cropping up in the private pension system in this country, it behooves board members to drill down to make sure companies are getting it done right." For the complete article, click here.
To see how your company can effectively and rapidly accomplish your Sarbanes-Oxley compliance efforts, see www.issuescentral.com to learn more about the Compliance Playbook(tm) or call toll free today 800.410.6681 ext 112.
