IFRS prompts KAS to change pension scheme
NETHERLANDS - Dutch securities services provider KAS Bank is to change its own pension scheme amid higher costs as a result of new International Financial Reporting Standards.
The Amsterdam-based group said: "We have gained a further insight into the effects of the implementation of IFRS on the reported pension charges in the event that the current final pay scheme remains unchanged.
"An additional cost item of approximately four million euros million per annum should therefore be taken into account.
"However, KAS Bank will consult with the pension fund in the short term in terms of adapting the current final pay scheme into a multi-tier final and average pay scheme."
It said that expenses would decrease and allow "better anticipation" than currently.
"The adverse effect of the implementation of IFRS should decrease in the coming years and will then amount to approximately three million euros gross.
"The expectations are that there will be more clarity about this matter during the coming months."
The bank’s comments come after an executive at TKP Pensioen warned that IFRS could lead to the closure of dozens of small pension funds in the Netherlands. Anne Laning, controller of the seven-billion euro scheme said the new accounting standard will increase administrative costs for all pension funds.
KAS posted a net profit of 4.5 million euros for the third quarter - "in line with our previously declared expectations".
It said: "This result is a considerable improvement on that of the third quarter of 2003, when a net profit of 3.3 million euros (including a 2.2 million-euro tax windfall) was realised.