Current issues in pensions financial reporting Q4 2024

Our latest update addresses the critical considerations for pension disclosures as at 31 December 2024. 

Covering UK (FRS102), EU (IAS19), and US (ASC715) standards, this briefing highlights the latest market trends, regulatory updates, and accounting challenges.

Key insights

• Market movements and discount rates: Rising corporate bond yields have led to a decrease in IAS19 liabilities, improving the balance sheet position for many schemes. However, outcomes depend on the mix of liability hedging and growth assets.
• Surpluses and asset ceilings: The prevalence of accounting surpluses raises questions about the recognition under IAS19 and FRS102. Legal and actuarial assessments may be needed to navigate these complexities.
• Inflation assumptions: Market-implied inflation rates and upcoming reforms to the Retail Prices Index (RPI) in 2030 significantly impact assumption setting. Directors must consider both short-term trends and long-term expectations.
• Mortality projections: The adoption of the latest CMI_2023 model introduces flexibility in weighting pandemic years’ data. Additionally, the S4 mortality tables may result in liability changes based on scheme-specific analyses.
• Regulatory developments: Developments and ongoing uncertainties around the impact of the Virgin Media case are creating challenges for sponsors and auditors alike.

Practical support and tools

Illuminate – Interactive modelling tool

Gain instant insights into the sensitivity of your scheme’s financial position to year-end assumptions. Illuminate enables finance directors to link pension impacts to core business plans while benchmarking against FTSE350 assumptions.

Specialist training

Our consultants offer workshops on FRS102, IAS19, and ASC715, providing practical insights into the theory and real-world implications of pensions financial reporting.

Global consolidation services

Streamline the consolidation of multiple arrangements across currencies and advisers. Through MBWL International, we simplify global pension reporting and provide strategic advice for managing pension risks.