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Post-employment benefits

Date recorded:

The staff presented to the Board a very broad summary of the feedback received from the extensive outreach activities conducted during the exposure period of the ED Defined Benefit Plans for which the comment period ended on 6 September 2010, to provide the Board with an overview of the main issues raised by participants. The staff explained that the summary of feedback does not include the comments from the more than 200 comment letters received on the ED.

The overall objectives and direction of the ED is well supported, however in many cases, the support has been qualified on the basis that the Board will continue its long-term project to do a comprehensive review of IAS 19 in future as respondents regard the proposals as better than the current requirements, but far from perfect and should be developed further. If the Board decides not to perform such a comprehensive review, the responses could be different. The overall criticisms against the Board's proposals focussed on behavioural implications of the proposals, divergence from US GAAP and the cost vs. benefits of the proposals.

The respondents to the outreach activities raised concerns on the following specific proposals:

  • recognition - removal of corridor
  • disaggregation and presentation
  • disclosures
  • other issues in the ED that don't require a fundamental review of IAS 19, but would be improvements, such as administration costs, multi-employer plans, merging of other long-term benefits with post-employment benefits
  • issues not covered in the ED, such as interim reporting
  • transition.

The staff explained that respondents expressed mixed views on the disaggregation and presentation proposals and that the views expressed can be grouped as support convergence with presentation in US GAAP, support for retaining the use of expected return on assets and option for presenting actuarial gains or losses in OCI and support for the proposals on net interest included in the ED. The Board was informed that an analysis of the comment letters received on the ED will be presented at the Board meeting in October.

The Board considered the proposed timetable for the expected timing of discussions on the issues identified in the comment letters. In terms of the proposed timetable, the Board hopes to finalise the re-deliberation of the various issues by December to be able to publish a final standard in March 2011. The Board noted that the amendments to IAS 19 relating to termination benefits have not yet been finalised due to resource constraints and that they would be published together with the amendments arising from the ED, as a complete package of amendments to IAS 19.

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