NETHERLANDS - Dutch social affairs minister Piet Hein Donner has asked that the International Accounting Standards Board's new accounting rules for listed companies take into account pension arrangements under which liabilities are not fully carried by the employer, but by an independent pension fund.

The minister said proposed amendments to IAS19 would force employers to carry more liabilities on their balance sheets than necessary, and that sponsoring companies would avoid accepting risk.

He said: "The Exposure Draft doesn't provide a satisfactory solution for hybrid systems, in which the obligations of a defined benefit (DB) plan are not fully carried by the employer, but by its legally independent pension fund."

In his opinion, accounting for DB plans should aim at quantifying the employer's obligations, as well as fully recognising caps on employers' obligations and risk-sharing arrangements by the participants of its pension fund.

The minister said employers' liabilities could be affected by a range of requirements for workers to help reduce an existing shortfall, such as through different discount rates, or through legal options to limit employers' obligations.

The measurement of an employer's obligation should be reflected by caps and risk-sharing arrangements, not a pension fund's performance target, he added.

In a separate letter to the IASB, the three lobbying organisations - VB, OPF and UvB - stressed that almost all Dutch pension plans employed conditional indexation, and that the employer only had to pay the agreed contribution for a certain period.

The representative bodies also asked the IASB to clarify the actuarial risks companies that participate in industry-wide pension funds must show in their financial reports.