Pensions are financial arrangements that allow individuals to receive an income stream during their retirement years (Tatum, 2011). They are found in government institutions, private businesses, professional groups and various other settings. Pensions funds can be found as a part of an institutions or as an independent plan. Pension plans are a major participant in the capital markets. For example, consider the fact that Ontario Teachers’ Pension Plan has a net asset value of $96.4 billion at the end of December 31, 2009. Due to the large stake of pension plans in the local and global economy, there is a persistent pressure to improve pension accounting. These changes have gained momentum with the recent adoption of the International Financial Reporting Standards (IFRS) in Canada and expected adoption by the United States in the near future. It is our belief that the various changes in pension accounting have improved investor decision making and benefited other stakeholders. To illustrate this, we will first explain pensions plans in greater detail and secondly, we will discuss various recent and near future expected changes to pension accounting in the Canada, in particular Section 4600 in Part IV of the CICA Handbook and International Accounting Standards (IAS) 19. These changes will be explored specifically in the context of private entity pension plans and with a particular focus on defined benefit plans. Lastly, we will provide evidence as to why these changes are necessary and how they benefit the stakeholders involved.
Pension plans have various stakeholders including but not limited to investors, employees, management (employers), creditors and analysts (Glaum, 2009). Tax payers and governments can also be added to that ...
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...to IAS 19. Retrieved from http://www.ifrs.org/NR/rdonlyres/0F38AB00-2FC7-4052-A9A9-F13F3759D8FE/0/EDIAS19DiscountRates.pdf.
International Accounting Standards Board. (2010). Defined benefit plans: Proposed amendments to IAS 19. Retrieved from http://www.iasb.org/NR/rdonlyres/A366AC39-6AE3-4516-A81D-ACFB4A9E5D42/0/EDIAS19DefinedBenefit.pdf
International Financial Reporting Standards. (2010). Snapshot summary document of exposure draft. Retrieved from http://www.ifrs.org/NR/rdonlyres/944C6CFC-1EC1-4796-BA56-0BCF590E9329/0/SnapshotAmendstoIAS19new.pdf
Revsine, L. (1989). Understanding Financial Accounting Standard 87. Financial Analysts Journal, 45(1), 61. Retrieved from ABI/INFORM Global. (Document ID: 457232).
Tatum, M. (2011). What is a Pension Plan? Retrieved from http://www.wisegeek.com/what-is-a-pension-plan.htm.
You have received a variety of key features documents to help you decide which pension product to have. If you have any queries regarding the key features documents, or anything about this suitability report then please do not hesitate to contact us. This document should be kept with your client agreement, and these documents were given to you at your last meeting.
The push for Congress to pass legislation protecting the rights of employees and their retirement was inevitable. Retirement plans are extremely important for all working individuals. Having funds to keep or exceed ones current standard of living and to enjoy one’s life beyond expectations after retire...
Patrick, C 2004, The Guardian: Australia may hold key to pensions, 12 October 2004, retrieved 21 July 2006
Reimers, Jane L. (2003). Financial Accounting A Business Process Application. Upper Saddle River, New Jersey, Prentice Hall.
Personal Differences. In this case, Dan Richardson, a partner in Educational Pension Investments (EPI), founded EPI with a philosophy of maintaining low-risk investment portfolios with moderate income; a philosophy that has been in place for 50 years. This risk adverse philosophy found Dan considering the merits of a more aggressive investment approach to offset the fact that EPI’s growth has not kept pace with other investment opportunities. (Whetten & Cameron, 2011)
There are many trends aiding in the reshaping of Canada’s pension plan industry – going from greater employer interest in sharing or off-loading pension risk to an increased concentration on de-risking.10 An increasing amount of Canadian employees are switching from Defined Benefit plans by removing the DB option for new employees or by introducing a “soft or hard freeze”, according to Borden Ladner Gervais lawyer, James Fu.11 As DB plans are on the decline, Canadian industries are experiencing a growth in capital accumulation plans, such as voluntary retirement savings plans (VRSPs) and pooled registered pension plans (PRPPs) – new contracts designed mostly for the sake of the self-employed and for those employees lacking in workplace pension plans.12 In contrast, Canada’s Research-Based Pharmaceutical Companies assigned IMS Brogan to research and provide an estimation of the overall private drug costs for 2013 to 2017.13 Their report said that Canadian private pharmaceuticals plan drugs cost (such as wholesale and pharmacy makeup plus ingredients costs) should exhibit a growth of a compounded annual rate of 1.6% to 2.8%.14 Following the decrease in interest and benefits in pension plans, the Canada Pension Plan benefits have been increased by up to 1.2% for those already part of it.15 As seen in the article, Canadian companies large or small, are trending towards dropping the DB and DC pension plans and creating a more suitable hybrid program, involving DB and DC pensions
Marshall, M.H., McManus, W.W., Viele, V.F. (2003). Accounting: What the Numbers Mean. 6th ed. New York: McGraw-Hill Companies.
Pension provides an income when people have stopped working. Also, it provides important forms of insurance against long life, prices, relative benefit drops and savings shocks. As well as it is an important benefactor to the financial security of a majority of Australian men and women of retirement age, with about 70 per cent of people of pension age receiving the Age Pension (Australia and Treasury, 2015). The government can provide this type of insurance for less than it costs individuals to insure themselves by sharing long life risk, and hedging the
Ross, S.A., Westerfield, R.W., Jaffe, J. and Jordan, B.D., 2008. Modern Financial Management: International Student Edition. 8th Edition. New York: McGraw-Hill Companies.
Gibson, C. H. (2011). Financial reporting & analysis: Using financial accounting information. (12th ed.). Mason, OH: South-Western Cengage Learning.
Albrecht, W. S., Stice, J. D., Stice, E. K., & Skousen, k. F. (2002). Accounting Concepts and Applications. Cincinnati: South-Western.
Unfunded Mandate Reform Act of 1995. 2001. The Cato Review of Business & Government. 24 April 2003.
Financial Accounting Standards Board. (2006, July 6). Conceptual Framework for Financial Reporting. Financial Accounting Series , 1-55.
There is need to think of all people who are to be affected by the project or strategy, those who have influence or power over it or have an interest in its successful or unsuccessful conclusion. Stake holders for Delta corporation include:-
retirees, it must not be mistaken as a financial entity on which people can live