1. March 2007 AEG meeting Chapter 17 - pensions
Main substantive comments

2. Question 1: three systems
Paragraphs to essentially describe two pension systems:
Universal pension
Employment related
Universal includes « social assistance »?
Better to present three systems:
Social security pension scheme
Other employment related schemes
Social assistance schemes

3. Question 1 Three systems = Three treatments of pension liabilities:
Social security = not in core accounts but in supplementary table
Other employment related schemes = in core accounts (optional for government)
Social assistance = no recognition at all

4. Question 1
Does the AEG agree that these three categories should be clearly presented in the chapter?

5. Question 2 : supplementary table
AEG (near) consensus on compromise on pension
=> supplementary table
Objective = controlled flexibility for better international comparisons
Principles:
(1) all non government pension liabilities in the core accounts
(2) government sponsored: optional in the core accounts, but compulsory in the supplementary accounts.

6. Question 2
Does the AEG agree that the principles governing the supplementary table should be introduced in a prominent position in the chapter?

7. Question 3: transfer of pension entitlements
Paragraphs and describe pension transfers between pension funds.
But no description of transfers between different types of pension schemes, in particular when no liability is recorded for one of them (government sponsored)
Frankfurt AEG: « when the obligation to pay pensions passes from one unit to another, this should be recorded as a trabsaction in pension liabilities even if neither unit has previously recorded them »

8. Question 3
Does the AEG recommend that this principle is included in Chapter 17 or, a reference is made in Chapter 17 to relevant paragraphs of the future Chapter 21?

9. Question 4: sub-social security schemes
Social security scheme = no pension liability
Social security unit can include several schemes, including independent defined contribution scheme, or funded defined benefit scheme.
Frankfurt AEG => separate these schemes and record liability correspondingly

10. Question 4
Does the AEG agree that the principle of recording pension liabilities for a scheme « where the benefits are related to contributions » even though the scheme may be described as part of a social security unit, is referenced in Chapter 17?

11. Question 5: sponsor and pension
AEG principle: pension funds have zero net worth => any underfunding is attributed to the sponsor (employer)
Paragraph describes the possibility of this asset of the pension fund towards its sponsor.
But does not propose a classification of this asset.

13. Question 5
Also, the paragraph does not introduce the necessary imputation of a property income from the sponsor to the pension fund, based on this asset.
This imputed property income is necessary to ensure that the net saving of the pension is zero (zero net worth).
Property income = amount of increase in (past service) pension liabilities due to passing of one year, minus any property income received by the pension fund on its funds.

14. Questions 5 a and 5 b
5. b: Does the AEG agree that it is essential to record this imputed property income from the sponsor to the pension fund?
5 a: Does the AEG agree to classify this asset as F6 (insurance, guarantees and pension) rather than in « Other accounts receivable payable »?