Aon, the risk management experts, have estimated that the final draft of IAS19 could take billions of pounds off company balance sheets.

The draft standard requires that employers who agree a funding target over and above their pension liabilities under IAS19 should record the difference as an extra pension liability.

Marcus Hurd, senior consultant and actuary at Aon Consulting, said the new standard appeared to have ‘a negative impact on some companies’ balance sheets'.

'The negotiation between employers and trustees on agreed funding targets has reached a new level of significance, because the agreed target may now also appear on a company’s balance sheet,' he said. 'It remains to be seen how actuaries and auditors will apply the rules in practice, but it is likely that employers will be more reluctant to agree higher funding targets.’

Aon said the aggregate pension scheme deficit for the largest 200 UK pension funds stands at just £2bn at the end of June after spending most of the month in surplus.

Further reading:

Managing pension liability: risky business

Scramble to boost pension schemes ahead of PPF levy