Pension Obligations in the European Union: A Case Study for Accounting Policy

Yuri Biondi and Boisseau-Sierra Marion ()
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Boisseau-Sierra Marion: DRM Finance, Université Paris-Dauphine, PSL Research University, Place du Maréchal de Lattre de Tassigny, Paris, France

Accounting, Economics, and Law: A Convivium, 2017, vol. 7, issue 3, 27

Abstract: Pension obligations constitute a critical issue for public finances and budgets. This is especially true for the European Union whose institutional mechanism aims to supervise Member States’ spending through centralised budgetary rules based upon financial covenants. In this context, accounting methods of recognition and measurement of pension obligations become an integral and critical aspect of Europe’s transnational budgetary and financial supervision. Drawing upon a comprehensive overview of pension management and regulation, this article aims to analyse the ongoing debate on accounting for pension obligations with a specific attention to the harmonization of European Public Sector Accounting Standards (EPSAS). While the European Commission has been favouring the ‘indisputable reference’ to the International Public Sector Accounting Standards (IPSAS), European Member States’ practices and views remain inconsistent with the normative solution imposed by the IPSAS 25, which favours and facilitates Definite Contribution pension schemes. In this context, we do summarise the IPSAS position mimicking the IFRS, review the pension’s accounting in national statistics and EPSAS debate, and provide some building blocks for a comprehensive model of accounting for pension obligations that admits and enables several viable modes of pension management.

Keywords: pension provision; pension benefit; pension liability; IPSAS; EPSAS; pension fund management; actuarial evaluation; public sector accounting regulation; public finances (search for similar items in EconPapers)
JEL-codes: G23 G28 H55 K23 M41 M48 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1515/ael-2017-0027

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Accounting, Economics, and Law: A Convivium is currently edited by Reuven S. Avi-Yonah, Yuri Biondi and Shyam Sunder

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