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Accounting Standards for Pension Plans

2023 Annual Improvements

Summary

The AcSB has adopted an annual improvements process that will amend accounting standards for pension plans to clarify guidance and correct wording for unintended consequences, conflicts, or oversights. Major improvements to the standards, such as the issuance of a new standard, are not included in the annual improvements process.

In December 2022, the AcSB amended Section 4600, Pension Plans to introduce new measurement and disclosure guidance for guaranteed annuity contracts, commonly referred to as “buy-in” annuity contracts. Through its annual improvements process, the AcSB is exploring providing relief from certain existing disclosure requirements that may become less relevant as a result of the new guidance. This would affect pension plans applying the standards in Part IV of the CPA Canada Handbook – Accounting, as relevant.

Staff Contact(s)

Shalini Gupta, CPA, CA Principal, Accounting Standards Board

Project Status

  • Information gathering

    Completed in early 2023

  • Approving project

    The AcSB approved the project at its March 8-9, 2023 meeting

  • Consulting stakeholders

    The AcSB issued its Exposure Draft – 2023 Annual Improvements to Accounting Standards for Pension Plans in May 2023

  • Deliberating feedback
  • Final pronouncement

News


May 3, 2023

News, Document for Comment

AcSB Exposure Draft – 2023 Annual Improvements to Accounting Standards for Pension Plans

The AcSB issued an Exposure Draft proposing annual improvements to accounting standards for pension plans. These improvements relate to disclosures for guaranteed annuity contracts, commonly referred to as “buy-in” annuity contracts. We encourage you to submit your comments by June 2, 2023.

Meeting & event summaries


April 25, 2023

AcSB Decision Summary – March 8-9, 2023

The AcSB also discussed disclosures for buy-in annuity contracts. In December 2022, Section 4600 was amended to introduce new measurement and disclosure guidance specific to buy-in annuity contracts. Those amendments are effective for fiscal years beginning on or after January 1, 2024, with earlier application permitted. Following the amendments, buy-in annuity contracts would no longer be measured at fair value, but rather at a value equal to the related benefit obligation adjusted for amounts receivable under the annuity contract that are not collectible. For investments that are financial instruments, paragraph 4600.32 requires pension plans to provide the disclosures required by IFRS 7 Financial Instruments: Disclosures as well as the fair value disclosures required by the Appendix to Section 4600. The Board thinks that, once the amendments take effect, paragraph 4600.32 disclosures may become less useful for buy-in annuity contracts. The Board will seek feedback from its Pension Plan Working Group in April 2023 and consider whether to amend the disclosure requirement in paragraph 4600.32 to scope out buy-in annuity contracts.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal voting process.