Post-employment Benefits

Date recorded:

No decisions were taken during this session.

Among the key issues that the Board will address in its project on employee benefits are:

  • accounting for 'intermediate risk plans' (an 'intermediary risk plan' is a pension plan where the risks are shared between the employer and the employee); and
  • the definition of defined contribution and defined benefit plans.

At the October meeting the Board held an educational session that covered how different pension schemes attribute risk between the employer and employee, and the measurement issues that are created. The session was split in two parts. Tim Reay from Hewitt (UK) briefed the Board on types of risks in intermediate plans and also presented findings from a research study on intermediate plans. Geert De Ridder from Deloitte (Belgium) held the second session, which focused on measurement problems in accounting for defined benefit plans when the risks are shared as in intermediary risk plans.

The Board debated the discontinuity in measurement that may arise between 'pure' defined contribution plans and defined contribution plans with a minimum guarantee. (Belgian law requires defined contribution plans to have minimum guaranteed rates of return). This plan would be classified as a defined benefit plan under IAS 19, which would create measurement differences if service costs deviate from contributions during the plan.

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