1. Employer Pension Schemes
Presentation Points
IMF Statistics Department
OECD-UN ECE Meeting On National Accounts
Paris, October 12-15, 2004

2. Employer Pension Schemes: Main Issues
Background: what is the problem?
Electronic discussion group (EDG)
The EDG’s main recommendations

3. Background: What Is The Problem?
1993 SNA only recognizes pension obligations for funded employer pension schemes
No such obligations are recognized for unfunded pension schemes

4. Background: What Is The Problem?
Not recognizing unfunded schemes
Violates the 1993 SNA’s fundamental asset criteria
Ignores liabilities usually recognized by economic agents in their own accounts
Distorts measures of household savings

5. Electronic Discussion Group
In 2001, the ISWGNA requested the IMF set up an EDG on unfunded employer pension schemes
In 2002, the EDG was asked to cover all such schemes
In February 2004, the ISWGNA-AEG meeting endorsed the EDG’s main recommendations
To meet recent requests from courtiers, the ISWGNA has decided to delay decision to 2005

6. The EDG’s Main Recommendations
Abandoning the different treatment of funded and unfunded schemes
Using actuarial valuations for both stocks and flows
Allocating the funds’ net assets to the employers

7. Why Abandon The Different Treatment?
Removes an unequal treatment from the accounts
Meets households’ perceptions
Improves measurement of cost of labor
Improves consistency with GFSM 2001
Improves basis for economic decision making and international comparability

8. Why Use Actuarial Valuations?
For unfunded schemes self-evident
By extension then also for funded schemes
Will reinforce market valuation and accrual recording

9. Why Allocate The Funds’ Net Assets To The Employers?
Equal treatment across schemes
Enhances international comparability
Conforms with generally accepted accounting principles