Unions demand end of FRS 17
Unions have this week called on the government to suspend the new pensions standard which companies claim is forcing them to close final salary pension schemes.
On Tuesday this week Roger Lyons, the head of the union Amicus, urged the government to intervene to avoid employees’ losing out because of the new standard.
FRS 17 – the new pensions standard that will become fully effective next year, requires companies to show full liabilities and assets on the balance sheet – a radical shift from the previous practice of smoothing over pensions figures to avoid volatility in the accounts.
CIPFA this week said it was committed to fully implementing FRS 17 in local government to make the cost of funding pension scheme mores transparent.
Warding off concerns that the local authorities could follow public companies by closing final salary schemes Vernon Soare, policy and technical director at CIPFA, said: ‘Local authorities can’t act like a plc board. Local authority schemes are dictated by a [pensions] statute.’
Most of the UK’s leading companies have now closed final salary pension schemes to new entrants, but more worryingly for many employees is the closure of the schemes to existing members as Ernst & Young has done.