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Employment Benefits - AcSOC

Date recorded:

At the Accounting Standards Oversight Council meeting on February 23-24, 2017, there was an extensive discussion of this project. Discussing New Brunswick’s key accounting and audit decisions in 2014-2016, the Auditor General of New Brunswick commented that the Province’s 2015 financial statements were qualified owing to the Office of the Controller’s use of defined contribution accounting, rather than defined benefit accounting for its shared risk pension plans. She said that the Province had disregarded expert advice that defined contribution accounting was inappropriate for these plans. In 2016 the Office of the Controller agreed with the position of the Auditor General and this resulted in a restatement of the Province’s financial statements receiving a clean audit opinion. Following this, the Chair of PSAB’s Employment Benefits Task Force, presented an update on the project which is a top-priority project for PSAB for a number of reasons, including the following: the evolution of accounting, following the G20’s criticism in 2008 regarding the unrealistic accounting for pensions; criticism of the discount rates used in the public sector to calculate pension obligations; and the creation of shared risk/target benefit plans. The PSAB has adopted a two-phase approach: Phase one will deal with deferral provisions (which smooth liabilities and expenses) and discount rates with potential amendments to the existing employee benefit standards; and Phase two will cover non-traditional and multi-employer defined benefit plans, other issues and improvements, resulting in a new employment benefits standard and the withdrawal of the existing standards.

Review the meeting summary on the AcSOC's Web site.

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