Accounting for liabilities backed by 50% of schemes

ALOST HALF of pension funds now believe that liabilities should be included on annual scheme accounts, according to latest research.

The survey, conducted by KPMG in advance of the publication of Accounting Standards Board proposals to bring accounting for UK schemes into line with international reporting requirements, found that 49% of respondents backed the measure, reported sister publication Professional Pensions.

This would mean schemes – which presently only have to report annually on the position of their assets – would have to provide a figure for their liabilities either as a report note, or as part of a balance sheet.

KPMG executive adviser Kevin Clark said this represented a major shift in opinion.

“In the past it was clear that those preparing and using these accounts would have wanted to stick with the status quo,” he said. “But now it’s not so clear – there is as much support for the option to bring liabilities into scheme accounts.”

He added the results suggested the industry was moving closer to recognising the need for more transparent financial reporting.

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Fiona Westwood of Smith and Williamson.