The Public Sector Accounting Board (PSAB) issued its third document for comment as part of its Employment Benefits project, Employment Benefits: Non-traditional Pension Plans.

Non-traditional pension plans involve employers sharing different degrees of risk related to pension benefits with other parties, including employees and other employers. Examples include:

• joint defined benefit plans;
• multiemployer defined benefit plans;
• target benefit plans; and
• plans with any risk-sharing provisions, such as contribution limits, contingent contributions and contingent benefits (including conditional indexation).  

A key principle explored in the document is that entities would report their share of the accrued benefit obligation of the pension plan in their financial statements, reflecting the substance of the plan’s terms and taking into consideration relevant factors, facts, events and circumstances.

This may have significant effects on the accrued benefit obligation reported by municipalities.

One of the implications is that defined contribution accounting would no longer be the default accounting for municipalities participating in multiemployer plans. The municipality would need to consider whether they have any obligations to make additional contributions to multiemployer plans if there are not enough assets to pay for benefits.  

Influence the future of pension accounting and respond by February 1, 2019.

Learn about the key features of the document by:

• reading In Brief, a plain and simple overview of this document for comment; and 
• registering for the webinar on November 16 (English) and 22 (French) presented by members of PSAB’s Employment Benefits Task Force.