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Key research themes
1. How do pension accounting standards and valuation methodologies impact the measurement and reporting of pension liabilities?
This theme focuses on the development, rationale, and controversy surrounding pension accounting standards, particularly how assumptions, measurement approaches, and regulatory frameworks influence the reported value of pension liabilities. It examines how accounting choices impact balance sheet recognition, earnings figures, and investor decision-making, with specific attention to challenges in actuarial valuation and the volatility introduced by differing discount rates and recognition options.
Key finding: This review highlights that pension accounting standards have evolved amid significant controversy due to the long-term, assumption-sensitive nature of pension liabilities. The paper explains the shift by IASB and FASB to... Read more
Key finding: This paper discusses the conceptual difficulties standard setters face in defining pension liabilities and expense recognition, emphasizing the tension between faithful representation and economic consequences. It reasons... Read more
Key finding: By reviewing the impacts of FAS 87 adoption, this work shows that recognizing pension liabilities on balance sheets increased earnings volatility and affected corporate valuations. It details the composition of net periodic... Read more
Key finding: This discussion supports using a risk-free discount rate for discounting pension liabilities to eliminate distortions caused by volatile market rates. It also highlights the complexity of including future salary growth in... Read more
Key finding: This work critiques current System of National Accounts (SNA) guidelines that exclude 'implicit' pension liabilities in unfunded schemes from macroeconomic accounting. It argues for extending accounting rules to recognize... Read more
2. How do funding practices and regulatory frameworks shape the financial health and risk management of public pension plans?
This theme investigates the interaction between pension funding methodologies, actuarial assumptions, regulatory changes, and their effects on the funded status and risk profiles of public sector pension schemes. It includes analyses of the implications of smoothing asset values, discount rate choices, employer covenant strength, and risk management frameworks on pension plan sustainability and the transparency of financial reporting.
Key finding: The study documents how smoothing of actuarial asset values and use of expected long-term return discount rates inflate reported funded ratios, masking the vulnerability of public pension plans. It shows that adopting GASB 67... Read more
Key finding: This update reveals an overall decline in funded ratios for state and local pensions despite rising markets, driven by actuarial smoothing and slower asset growth versus liability increases. It highlights that continuing use... Read more
Key finding: The paper critiques UK scheme-specific funding methods for not sufficiently linking actuarial prudence to the employer covenant strength and for inadequately integrating funding and investment strategies. It proposes a novel... Read more
Key finding: Research shows locally administered pension plans tend to have lower funded ratios than state-administered ones despite paying higher percentages of their required contributions. The paper attributes this to lower investment... Read more
Key finding: This empirical study of Lagos State's contributory pension scheme identifies risks arising from employee contributions, remittance inefficiencies, and eligibility misclassifications. It demonstrates positive correlations... Read more
3. What lessons can be learned by comparing national pension systems regarding adequacy, sustainability, and pension reform?
This theme encompasses comparative analyses of pension systems to identify factors contributing to sustainability and adequacy. It includes the evaluation of demographic pressures, governance structures, funding levels, and policy reforms in different countries, providing insights for pension system design and ongoing reform needs in a global context.
Key finding: This comparative analysis identifies that pension systems in Iceland and the Netherlands achieve high ratings for sustainability and adequacy due to effective funding mechanisms, governance, and structural reforms. However,... Read more
Key finding: The bibliometric review reveals an increasing research focus on pension system sustainability in the context of ageing populations and declining birth rates. It documents trends towards multidisciplinary approaches including... Read more
Key finding: Focusing on Italian professional 'old funds,' this paper finds current statutory financial statements underreport pension benefit obligations (PBOs). It proposes enhanced disclosure techniques, including explanatory notes... Read more
Key finding: Besides local public sector pension risk management, this study also contributes comparative insights regarding management challenges faced by pension systems in emerging economies. It highlights how contributory schemes... Read more