Pensions chief demands reform of accounting

The chairman of the National Association of Pension Funds (NAPF) has described the current accounting for pensions as "unsatisfactory" and said he wants to see the policy reformed.

Writing in a letter for today's Financial Times Lindsay Tomlinson said: "We still believe that continuously marking to market funds, which should be in existence for our lifetimes, is not the best approach. That is why we wish to stir up a campaign to change pension accounting."

Tomlinson made clear he did not blame accounting alone for the difficulties faced by defined benefit schemes. He said pension funds needed government to address the fiscal deficit by issuing long-dated index-linked and conventional gilts with decent long-terms yields would give them the securities they to invest in.

The NAPF has been seeking changes to the existing pension policy, IAS19, under international standards. The body objected vehemently last year to proposals put forward last year by the UK Accounting Standards Board claiming they would significantly increase the liabilities of defined benefit schemes.