Pension
Chapter scope notes
Exclude alternative measures of pension obligation (p.1202)
Exclude Other Defined Benefit Plans (pp. 1216)
Exclude appendices
Characteristics of organizational relationship: operating company & pension plan
Emphasis will be on Defined Benefit Pension Plan accounting and reporting
Pension plans are provided by organizations to provide for eligible employees upon retirement
In Canada they are provincially regulated
The concept is straightforward: An organization places in a separate, but still owned entity or trust, sufficient assets, whose return should provide for future retirees. The Pension Plan entity is not consolidated with the related operating company.
The application is complex because of 1) the types of plans, 2) the means of determining the funding of plans and 3) the variables to consider in determining what constitutes pension expense today, for what will be expected pension benefit payments years from now.
The key players: Fund Manager and Actuary
Simplifying revisions (Immediate Recognition Approach) with IFRS, January 2013 but will result in expense reporting/earnings reporting volatility.
Principal operating features, application and disclosure; Private Enterprise and IFRS
Types of Pension Plans
Payments to Pensioners
Principal Operational Features
The Funding Schemes The make-up of and reasons for the Pension Plan Components
The reporting of pension expense under IFRS Standards and options under ASPE
Separate entity or trust owned by the company
Company Accounts Pension Plan
Record pension Pension Plan Performance expense
Funding
Pension asset/ Equal to net of plan or liability on B/S components
Types of Pension Plans
Defined contribution plans: benefits risk to retirees
Defined benefit plans: no benefits risk to retirees
Type of Plan
Contributions
Benefits
Defined contribution
Fixed
Exclude alternative measures of pension obligation (p.1202)
Exclude Other Defined Benefit Plans (pp. 1216)
Exclude appendices
Characteristics of organizational relationship: operating company & pension plan
Emphasis will be on Defined Benefit Pension Plan accounting and reporting
Pension plans are provided by organizations to provide for eligible employees upon retirement
In Canada they are provincially regulated
The concept is straightforward: An organization places in a separate, but still owned entity or trust, sufficient assets, whose return should provide for future retirees. The Pension Plan entity is not consolidated with the related operating company.
The application is complex because of 1) the types of plans, 2) the means of determining the funding of plans and 3) the variables to consider in determining what constitutes pension expense today, for what will be expected pension benefit payments years from now.
The key players: Fund Manager and Actuary
Simplifying revisions (Immediate Recognition Approach) with IFRS, January 2013 but will result in expense reporting/earnings reporting volatility.
Principal operating features, application and disclosure; Private Enterprise and IFRS
Types of Pension Plans
Payments to Pensioners
Principal Operational Features
The Funding Schemes The make-up of and reasons for the Pension Plan Components
The reporting of pension expense under IFRS Standards and options under ASPE
Separate entity or trust owned by the company
Company Accounts Pension Plan
Record pension Pension Plan Performance expense
Funding
Pension asset/ Equal to net of plan or liability on B/S components
Types of Pension Plans
Defined contribution plans: benefits risk to retirees
Defined benefit plans: no benefits risk to retirees
Type of Plan
Contributions
Benefits
Defined contribution
Fixed