BusinessCompany NewsASB wants better disclosure of final–salary schemes

ASB wants better disclosure of final–salary schemes

Governing body says disclosure must include the costs of insuring pension liabilities

The Accounting Standards Board has
issued a statement calling on companies to disclose any gap between assets in a
pension fund and the money needed to buy annuities for pension plan members from
an insurer.

The sum required to insure pension liabilities is typically known as the
‘buyout cost’

While not enforceable, recommendations on reporting proposals from the ASB
are typically widely adopted by British companies in their accounts.

The ASB has been reviewing how British companies should disclose the funding
status of
final-salary
pensions
, which have been hit by rising longevity, tough new accounting
rules and low bond yields, leading to pension plan closures and benefit cuts

Further reading:

Call to highlight risks in company reports

ASB policy change gives art galleries the brush-off

ASB vote will cause shake-up for pensions

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