PSAB Matters Article – Progress on our Employment Benefits Project

August 26, 2016 Resource

The Public Sector Accounting Board (PSAB) is making progress in its review of the standards on employment benefits, including:

  • Section PS 3250, Retirement Benefits; and
  • Section PS 3255, Post-Employment Benefits, Compensated Absences and Termination Benefits.

A  task force was appointed in the fall of 2015. Together with the task force, we are also supported by an advisory group to provide broader experience and perspectives on the issues.

The ultimate objective of this project is to issue a new Section on employment benefits in the CPA Canada Public Sector Accounting Handbook, replacing Sections PS 3250 and PS 3255.

Upcoming Invitations to Comment

The task force and the advisory group are working on the project’s first invitation to comment, which is expected to be issued in the fall of 2016. It will include a discussion paper that addresses the deferral provisions in Sections PS 3250 and PS 3255.

A separate invitation to comment on discount rates is expected to be issued in 2017.

Phased Approach

Given the complexity of the issues involved and the potential implications of any changes that may result from this review, we decided to undertake this project in phases.

Phase I

Phase I will address specific issues related to the measurement of employment benefits, including the deferral provisions and discount rate guidance in the standards. These are the major areas of differences between our standards and equivalent standards issued by other accounting standard setters.

Some stakeholders considered the financial information about employment benefits reported in the public sector financial statements less transparent and more optimistic than those reported in the private sector. The deferral provisions and discount rate guidance in Section PS 3250 are often viewed as the cause. Addressing these issues first would allow us to make amendments, if necessary, to the existing standards to enhance the quality of employment benefits financial information reported in financial statements.

Phase II

Phase II will address:

  • the accounting for plans with risk sharing features different from the traditional defined benefit and defined contribution plans (which include, but are not limited to, shared risk or target benefit plans);
  • the accounting for multi-employer defined benefit plans and sick leave benefits;
  • other improvements to existing guidance; and
  • issues that may arise or be identified by stakeholders throughout the development of the project.

Stay Informed and Get Involved

We want to engage stakeholders early in the standard development process so we can consider your input in developing preliminary views on various issues.

An update about the project and an overview of the invitation to comment on deferrals will be provided:

We encourage you to register for these sessions and respond to the upcoming invitations to comment.


Lydia So, CPA, CA
Principal, Public Sector Accounting Board
Phone: +1 (416) 204-3281