On Friday, March 27th, 2015, in keeping with the National Ordinance on the General Pension Fund Sint Maarten, the General Audit Chamber issued their report on the review of the 2012 financial statements of APS to Parliament and to the Minister of Finance. The 2012 financial statements of the APS cover the period from January 1st, 2012 until December 31st, 2012, and were issued by the APS on August 12th, 2014.
The reports represents the second review of the APS by the General Audit Chamber. By law, the fund is subject to annual review. The results of the review indicate areas of improvement over the previous year’s audit,. For example, the coverage ratio increased from 99,8% in 2011 to 100,4% in 2012. A coverage ratio of at least 105% is considered the benchmark in the Netherlands for avoiding shortages. Moreover, the 2012 financial statements of the APS reported a realized return on the investment portfolio of 5,5 percent.
The General Audit Chamber has however, identified a number of areas of concern based on the audit. Besides the financial statements themselves, the legal compliance with the National Ordinance General Pension Fund Sint Maarten as well as Governance, Compliance and Risk Management were evaluated.
The General Audit Chamber determined that APS’s claim against government at the end of 2012 of ANG 53,0 million is significant. The claim increased over the previous year (2011) when the amount of the claim was ANG 38,4 million. The General Audit Chamber recommends that attention is given to achieving a satisfactory settlement of the claim in order to prevent a loss of capital at the pension fund. In addition, the General Audit Chamber noted that the files of the APS are not complete in terms of participant data. This situation therefore increases the probability that the actual pension obligation as of the end of 2012 could be higher than the amount reported in the APS financial statements (i.e. ANG 433.501.000). These facts and uncertainties contributed to the General Audit Chamber refraining from issuing an opinion on the 2012 financial statements. We also were unable to conclude definitively whether the financial position of the fund was sound at the end of 2012.
In terms of legal compliance in 2012, the General Audit Chamber noted a number of items requiring attention, among which was the timely submission of budgets and financial statements as well as making annual reports publicly available.
The APS, in the opinion of the General Audit Chamber, was found to have a sound risk management system for investments – in terms of the general design – in 2012. Our recommendation in this regard to the APS is to improve the communication in terms of the investment committee. In addition, the General Audit Chamber suggests that the APS actively pursue dialogue with government regarding concerns related to the current pension regulation based on the results of their Asset-Liability-Management study.
The sustainability and soundness of the fund is of paramount importance to all stakeholders.
The report on the 2012 Financial Statements of the General Pension Fund Sint Maarten (APS) is available in both English and Dutch on the website of the General Audit Chamber (www.arsxm.org).