Pension standard to hit company bottom lines
Changes to IAS 19 could see move out of equities and a loss of £8.7bn in UK company profits
Changes to IAS 19 could see move out of equities and a loss of £8.7bn in UK company profits
Potential changes to how pension schemes are accounted for could see a mass
switch away from investment in equities.
Proposed amendments to IAS 19 will see significant drops in profit for those
companies heavily invested in equities, reports the
Financial
Times.
The move by the International Accounting Standards Board will stop companies
with defined benefit schemes assuming their equities will bring greater returns
than lower risk bonds, wiping out the incentive to keep them.
Consultants Mercer estimate the changes could wipe £8.7bn off the annual
profits of UK companies.