NETHERLANDS – The pensions accounting standard IAS19, which immediately recognises a scheme’s actuarial gains and losses, is being seen as a major issue for Dutch pension funds.

Currently, under Dutch directive RJ271, pension funds are not mentioned in the operating results of a company.

If IAS19, which is similar to the controversial FRS17 standard in the UK, is implemented totally, the position of pension funds will become a part of the overall corporate accounts - showing possible financial risks in future and a possibly negative effect on the operating results.

According to Peter Borgdorff, director of the Dutch Association of Industry-wide Pension Funds, the VB, several companies in the Netherlands are currently in conflict with their respective accountants on this issue.

According to a survey by Watson Wyatt late last year, less than a third of European companies are well prepared for the new standard.

Listed companies in the EU must report pension and other employee benefits costs according to the IAS19 standard from 2005. The implementation of IAS19 is supported by the Dutch government.

At present employers and social partners are not in agreement. There is, according to Borgdorff, the need to address the issue that the Dutch system is a different system.

The VB, the Vereniging van Bedrijfstakpensioenfondsen, was highly critical earlier this weel of the Dutch government’s backing of the Staatsen Commission review of pension funds’ commercial activities.

“It is extraordinary that the Junior Minister has taken up the Staatsen Commission’s recommendation that specific activities, which fall within the definition of core business, should be subjected to additional regulations,” said Borgdorff.