NETHERLANDS - The Netherlands Council for Annual Reporting (CAR) has asked that industry-wide pension schemes be exempt from the requirement to apply defined benefit accounting standards to the companies within such schemes.

International accounting rules, which come into force next year, require listed companies within multi-employer pension plans to account for their proportionate share of the DB obligation, plan assets and plan costs in the same way as for any other defined benefit plan.

The International Accounting Standards Board has sought the opinion of Dutch accounting bodies and Dutch pension fund associations in a consultation paper put out by the international Financial Reporting Interpretations Committee (IFRIC).

The leading associations have rejected the proposal. Martin Hoogendoorn, chairman of CAR, said in a letter to the IASB in London: “The costs of obtaining the information required by IAS 19 will exceed the benefits related to it.

“We support the calculation method as such but we see high practical barriers in obtaining the necessary information.

“We are in favour of an unqualified exemption of defined benefit accounting for participants in multi-employer plans.”

The Labour Foundation, which represents central employers and employees’ organisations in the Netherlands, has the support of the Dutch Association of Industry-wide Pension Funds, or VB.

The VB also opposes the IAS 19 requirement to provide information. It says that defined benefit accounting cannot be applied to pension plans Dutch within multi-employer schemes because employers do not bear the full risks of the pension plan.

In its evidence to IFRIC the Foundation says: “The information about pension_obligations is highly subjective and of little value. No information that can objectify the employers’ risks can be generated on the basis of the financial risks of the plan.”

“DC accounting for the individual employer in multi-employer plans does more justice to the share in obligations, assets and costs in practice than DB accounting does.”

The deadline for submissions closed last week and the IASB is expected to respond later in the year.

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