UK standards board backs FRS17
The chairman of the UK Accounting Standards Board has hit back at claims that the new FRS17 accounting rule is forcing the UK's leading employers to end their final salary pension schemes.
Mary Keegan, chairman of the ASB, said this week that there would be no relaxation of FRS17 after appeals were made by the National Association of Pension Funds.She said: ‘An accounting standard that helps everyone to understand what is happening is good news.’
She added companies made pension decisions on ‘economic’ grounds, ‘not accounting’.
However some of the UK’s largest employers, such as Whitbread, ICI, Lloyds TSB, Sainsbury’s and BT, have already stopped or plan to end their final salary schemes. Marks & Spencer plans to end its final salary pension scheme early next year.
FRS17, which will take effect in parts from now until 2003, requires companies to show the true value of their pension scheme assets and liabilities instead of spreading the cost of funding them over a number of years, as under the current standard, SSAP 24.
NAPF’s annual survey showed that 46 companies had closed their final salary schemes to new members during the year to October, compared with only 18 in 2000.
A total of 77% of more than 800 of the UK’s major employers polled said FRS17 would make it less attractive for employers to offer a final salary scheme.
Links
M&S latest to axe pension schemeM&S latest to axe pension scheme www.accountancyage.com/Business/1126672