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.

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