Section PS 3250 - Retirement benefits

Effective date:

September 1, 2001

Published by PSAB:

September 2001

Reach out to our Section PS 3250 Specialist

Diana De Acetis


This Section establishes standards on how to account for and report obligations for employee retirement benefits in government financial statements.

Obligations for retirement benefits result from a promise by a government to provide these benefits to employees because of retirement in return for their services. Pensions and other retirement benefits, such as extended health care and life insurance benefits, are a form of compensation offered for services rendered and accrue over the years employees render those services. The fundamental accounting task is to determine the amount of the obligation for retirement benefits to attribute to each period of employee service. Determining such amounts involves not only accounting for past transactions and events; it also requires forecasts of future events, such as inflation, investment returns, medical costs and employee turnover and mortality.

The accounting objective of Section PS 3250 Retirement benefits is to measure and report the obligation for employee retirement benefits and to attribute the costs of those benefits to the periods in which the related services are rendered. To meet that objective, a method is needed to determine the amount of the obligation for retirement benefits outstanding, which represents the liability at the financial statement date, and the value of the benefits employees earned during the period, which represents the expense of that period. Accordingly, it is necessary to develop accounting estimates of liabilities for retirement benefits and expenses using an actuarial cost method and actuarial assumptions that ensure essential information required for fair presentation of financial condition and results of operations can be reported in government financial statements.

Section PS 3250 establishes the requirements for defined benefit plans, defined contribution plans, multi-employer plans and multiple employer plans.  Section PS 3250 provides definitions of the various types of plans as well as guidance on helping an entity make the appropriate benefit plan classification.

History of Section PS 3250




September 2001

New Section

This new Section recommends how to account for and report a government's obligations for employee retirement benefits in government summary financial statements. The Recommendations are based on the Recommendations set out in previous Section PS 3250 Employee pension obligations.

Note: The above summary does not include details of consequential amendments made as the result of other projects.

Public Sector Accounting Discussion Group meetings

  • October 27, 2015 - Sections PS 3200, PS 3250 and PS 3255: Vacation Paid in the Year of Retirement
  • January 15, 2015 - Section PS 3250:  “Shared-Risk” Retirement Benefit Arrangements

Amendment under consideration

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.