UK - The Accounting Standards Board (ASB) faced a wall of opposition from the pensions industry at a public meeting to discuss its proposals to overhaul the way pension fund assets and liabilities are calculated and reported.
By far the most controversial element of the proposals was on the measurement of liabilities, for which ASB suggests using a risk-free rate rather than the high-quality corporate bond rate required by current accounting standards.
Hibbard said there was a need for a clear conceptual framework before such changes were made to the way pension assets and liabilities were calculated and reported, while Sykes, who is responsible for auditing a number of large companies with DB schemes, sought the views of 12 large public companies, many who were also opposed to the changes. "There is frustration with addressing a subject as important as pension accounting using a framework that some would say isn't fully fit for purpose," Sykes said.
Segers raised concern about the impact of the proposals, when considered along with other regulations on the horizon for pension schemes.
She said the Pensions Regulator's recent guidance on life expectancy projections, the introduction of auto-enrolment in 2012, and Solvency II could all add to pension schemes liabilities.
She said: "Taken together, and they would all come together around 2012-13, they are toxic enough to kill of the UK's remaining pension provision."
The speakers' views gained the support of trustees, consultants and other industry professionals in the audience, with one of the only dissenting views coming from speaker Crispin Southgate, director, Institutional Investment Advisors, who is also part of the Corporate Reporting Users Forum.
Southgate, who gave an analysts view, said pensions was one of the main items that should be a priority on the IASB agenda, and he welcomed the ASB's proposals.
He said: "I think it is a very balanced approach to the issues, a lot of them knotty."
ASB is consulting on the changes until 14 July and and ASB chairman Ian Mackintosh said it would listen to the debate carefully before making any decisions.
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