Accounting for Pension Obligations in the European Union: A Case Study for EPSAS and Transnational Budgetary Supervision

14th International Conference on Pension, Insurance and Savings, University of Paris Dauphine and University of Berkeley, Paris, 9 and 10 May, 2016

83rd International Atlantic Economic Conference (IAES), Berlin, 22-25 March 2017

41 Pages Posted: 28 May 2016 Last revised: 20 Feb 2017

See all articles by Yuri Biondi

Yuri Biondi

French National Center for Scientific Research (CNRS)

Marion Sierra

Université Paris Dauphine

Date Written: May 27, 2016

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

JEL Classification: H55, G23, G28, M41, M48, K23

Suggested Citation

Biondi, Yuri and Sierra, Marion, Accounting for Pension Obligations in the European Union: A Case Study for EPSAS and Transnational Budgetary Supervision (May 27, 2016). 14th International Conference on Pension, Insurance and Savings, University of Paris Dauphine and University of Berkeley, Paris, 9 and 10 May, 2016. Available at SSRN: https://ssrn.com/abstract=2785725 or http://dx.doi.org/10.2139/ssrn.2785725

Yuri Biondi (Contact Author)

French National Center for Scientific Research (CNRS) ( email )

IRISSO - University Paris Dauphine PSL
Place Marechal Lattre Tassigny
75016 Paris
France

HOME PAGE: http://yuri.biondi.free.fr/

Marion Sierra

Université Paris Dauphine ( email )

Place du Maréchal de Tassigny
Paris, Cedex 16 75775
France

HOME PAGE: http://https://www.linkedin.com/in/marionsierra

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