Explanatory Note
(This note is not part of the Regulations)
These regulations require each local authority to set up a fund which will record pension scheme deficits and surpluses for which local authorities have responsibility. This fund will be separate from the local authority’s general fund, and anything accounted for in this fund will not form part of the local authority’s general fund. This is to comply with section 12 of the Local Government in Scotland Act 2003, in terms of which it is the duty of local authorities to observe proper accounting practices. This includes those practices which by reference to any generally recognised code or otherwise, are regarded as proper accounting practices to be observed in the preparation and publication of accounts of local authorities. From this year local authorities will have to observe the CIPFA/LASAAC “Code of Practice on Local Authority Accounting in the UK: A Statement of Recommended Practice” which changes the way they account for pension scheme deficits and surpluses in line with Financial Reporting Standard 17 (FRS17).