UK - The Accounting Standards Board has given in to the growing pressure for a review into the financial reporting of pensions.
Pensions accountants had expressed concerns that reforming pensions accounting was not a high enough priority given the potential consequences of underestimating defined benefit liabilities.
The ASB said it was conducting the research project because of changes in UK regulation, the formation of the Pension Protection Fund (PPF) and the establishment of The Pensions Regulator (TPR).
Andrew Evans, pensions partner at Pricewaterhousecoopers (PWC) welcomed the move and said it was imperative the UK put its view forward to the International Accounting Standards Board (IASB). “Pensions are a key subject and more important in the UK then in some other territories. It is important its views are made clear to the IASB,” he said.
He said the key issues which needed addressing with the IASB were discount rates, salary increases and spreading.
ASB chairman, Ian Mackintosh said: “Accounting for pensions remains one of the most important and controversial areas of financial reporting.
“While FRS 17 stands comparison with any other pension accounting standard in the world, the scale and significance of the changes that have taken place since the standard was published has led us to conclude that the time is right for a fundamental review.
“We hope that our research will assist in the further development of international accounting for pensions which will lead to a sound basis for UK convergence.”
This week's edition of Professional Pensions is out now.
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