At the June meeting the Board agreed to add a post-employment convergence project to its active agenda. At this meeting the Board considered the first issue in the project -- the recognition of actuarial gains and losses (the unexpected changes in the value of the plan). The Board noted that resolving this issue depends, in part, on the format of the performance report.

IAS 19 and all national standards on pensions currently in force allow deferral of actuarial gains and losses in some way. This is not the case with the new UK standard FRS17, which is currently optional and will come into force in 2005). IAS 19 and FAS 87 also allow full immediate recognition as an option.

After discussion, the Board was asked to vote whether the '10% corridor' and 'smoothing' elements of IAS 19 should be removed. A majority of the Board members favoured eliminating both the corridor and spreading of actuarial gains and losses, subject to the discussion of the treatment of service costs during the vesting period. The staff will prepare a paper on this for the next meeting.