Pressure grows over FRS 17
The Accounting Standards Board is under pressure from the National Association of Pension Fund Managers to relax the requirements of its new controversial pensions standard.
Several of the UK’s largest employers have recently announced that they will be closing their final salary pensions schemes to new entrants as the new rule -FRS 17 – becomes effective, in part, this month.
NAPF’s annual survey on pension funds of 800 pension schemes showed that 77% believed FRS 17 would make it less attractive to offer final salary pension schemes.
NAPF director general, David Cranston, said the survey provided ‘graphic evidence of the pressures faced by employers offering final salary pensions.
‘Falling investment returns, combined with longer life expectancy undoubtedly account for much of this pressure. But the volume and complexity of red tape has clearly weighed heavily enough with some schemes to drive them away from final salary scheme provision,’ he added.
FRS 17 requires companies to recognise the true value of companies’ pension scheme assets and liabilities on the balance sheet.
Links
Opinion – The upside of FRS 17
BAA decision supports new pension rule
Audit guidance on pensions issued