UK pensions industry disapproves of IFRSs-iasplus

9 June 2011: UK pensions industry disapproves of IFRSs

On 29 October 2010, the UK Accounting Standards Board (ASB) published its proposals for the future of financial reporting in the UK and Republic of Ireland. The Exposure Draft (ED) set out proposals for a three-tier reporting framework, which aims to balance the needs of preparers and users of accounts. The ED included pension schemes in its scope and suggested that they should be classified as tier 1 in the ASB tier structure. Tier 1 companies will have to report under International Financial Reporting Standards (IFRS). Deloitte (United Kingdom) has conducted a poll to find out whether the pensions industry supports the proposals of the ASB. The results showed that: 43% of respondents were of the opinion that no change is needed in financial reporting by pension schemes; 75% of all respondents said that not all pension schemes should be classified as publicly accountable entities (i.e. have to apply IFRSs); where one third of these (24% of all respondents) agreed that some schemes depending on other factors should be classified as publicly accountable; Asked on which criteria the decision of public accountability should be based if not all pension schemes are to be classified as publicly accountable, the respondents named a consideration of the number of members in the scheme (26%), the value of investment assets held (11%) and a combination of members, investment assets and the level of contribution income (53%).