| Dutch corporate pension funds can relax: IFRS will not apply for now |
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| 18/04/2004 | |
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The Dutch Government has retracted from its initial stance about the application of the IFRS to corporate pension funds. Piet Hein Donner, the Dutch Minister of justice, decided that those funds and selected other financial institutions will finally not be subject to the new international accounting standards. Following a decision by the Dutch minister of finance in 2002, Dutch corporate pension schemes expected to have to work according to those new standards from 2005, as listed companies will have to. The current Minister of justice took the step to amend this decision and to stick to the European norms, which specify that only quoted companies have to use those rules. This decision falls while the overwhelming majority of Dutch corporate pension funds still had not initiated the transition process towards the IFRS. Defined benefits pension schemes, which are the keystone of the Dutch retirement system, should have implemented the new chart of accounts at the light of speed had this government turnaround not happened. "We are pleased by this decision because the objectives of a pension fund are completely different from the objectives of a firm: one is social while the other is profit-oriented", said to bfinance Peter Borgdoff, the director of the Dutch Association of industry-wide pension funds (VB). In an interview granted to Investment and Pension Europe, Jeroen Steenvoorden, director of the Dutch Association of Company Pension Funds (OPF) claimed that this decision would likely not have any impact on the performance of pension funds in the Netherlands, albeit the administrative burden would certainly be reduced in the short-run. Tailor-made However, all is not over for the Dutch pension funds since in the long run, at least a modified version of the IFRS is likely to be adapted for the pension schemes. The current debate pits social partners, who wish to amend certain aspects of the IFRS, and accounting firms, which support an integral implementation of the IFRS rules, among others the IAS 19. "The standard rule IAS 19 is one of the accounting rule that could be incorporated into the accounting charts if only it were adapted to the specific objectives of a pension fund", reminded Peter Borgdoff, who expects stormy discussions between accounting firms and the social partners over the coming months. Peter Borgdoff adds that the operating perimeter of the pension scheme's sponsor should also be taken into account while the IFRS are implemented. "We agree that international rules apply to the pension scheme of a multinational corporation such as Shell or Unilever, but the rules should differ for a local firm", he said, while emphasising that the accounting chart of pension funds should be adapted to their "social" objective, the main one being to match anytime its liabilities with its assets. This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
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