Discuss the disclosure of risks arising from defined benefit plans by Essay

Discuss the disclosure of risks arising from defined benefit plans by listed companies following IAS 19. Associated reading The - Essay Example The arguments made in this article form the basis of the recommendations that the authors have later made in their report for ICAS. 2) ICAS wants better disclosure of pension risk reporting, by Pat Sweet that appeared in September 2010 in Accountancy Magazine. 3) The FTSE 100 and their pension disclosures: Pension Capital Strategies quarterly report of February 2010. Discussion: The key risks associated with Defined Benefit Pension Schemes (DBPS) highlighted in the ICAS report are: the asset-price volatility caused by market driven factors, a mismatch in the duration of the assets relative to the liabilities and increase in the life expectancies of the individuals covered under these schemes. The increase in pension liabilities is directly proportional to the increase in life expectancies of those covered. There is also the risk to cash flows in cases where the company has to provide cash to fill or reduce the deficits in their DBPS. The report as part of its research surveyed the in formation relating to DBPS in the annual reports of FTSE 100 companies. The research survey covered all 88 companies, as on 31st December 1999, that had a Defined Benefits Pension Scheme for their employees. 80 of these companies had UK based DBPS schemes. The research of the report revealed that the total aggregate deficit faced by the DBPS schemed of FTSE 100 companies was GBP 53.5 billion. This deficit of GBP 53.5 billion was caused because the total liabilities of GBP 409 billion were backed by assets of only GBP 356.3 billion. There was widespread variation in the size of the schemes of the different companies and in the extent to which they were funded by the companies. Only ten companies disclosed the sensitivity of DBPS’ liabilities to all four actuarial assumptions. These four actuarial assumptions are: a) Future price inflation rates. b) Salary inflation. c) Mortality rates or life expectancy. d) The discount rate used to compute the present value of the liabilities . These actuarial assumptions have been recommended by the UK Accounting Standard Board’s suggested guidelines on best practices ( 2007 ). Thirty five companies disclosed no sensitivities to changes in actuarial assumptions. Disclosures of the companies increased with the size and strength of the schemes. The different industry sectors were compared and it was found that the banking sector had the highest level of risk disclosure of their DBPS. As far as assumption of future rates of price inflation were concerned, there were limited variations in the assumptions of the different companies. Salary growth assumptions ranged from 1.8% per year to 5.9% per year.There was significant variation in the time frame covered by the life expectancy forecasts of the different companies. These forecasts ranged from 5 years to 25 years in future. The recommendations of this report have caused some debate. One of those recommendations is that the companies should disclose the time estimatio n risks for those assets (in which the DBPS has invested) for which there are no quoted market prices. The second recommendation is that companies should do a sensitivity analysis of the pension liabilities vis-a-vis the four actuarial assumptions that have been mentioned above. The writers of the report justify this recommendation

History of work-family Essay Example | Topics and Well Written Essays - 1500 words

History of work-family - Essay Example This essay seeks to address how these changes have had an effect on employees and their relationships with their families. The project will also expatiate on the rules that have been put in place to help individuals have the ability to balance their lives in terms of family and work. Unlike in the past, employees are faced with so much pressure of being able to support their families. Coupled with the harsh economic times, it is becoming more difficult for employees to be able to have quality time spent with their families as many individuals opt to have two or more jobs so as to maximize on their income. This paper also discusses the history of work since the 19th century. It also examines the challenges that men and women who were in employment faced as they tried to acquire a balance between family and work (Hammill, 2005). The paper also looks at how social levels have an effect on family structures, and how these structures change with time. Finally, the paper also glimpses at t he expectations that the society had of men and women who had employment outside the home thorough 40s to the 60s. At some point between 1960 and 1980, the dynamics of the family changed, and this could be attributed to a number of factors. These issues included divorce, single parenting and same sex partners. Currently, some companies are implementing commitments to employees by creating environments of open communication, appealing jobs, safe working conditions, and good benefits. Researching European work/ family policies we can see where legislation might need to change to become beneficial to all. During the industrial revolution in America in late 19th century, many of the working class in America and Europe moved from the rural areas to find urban jobs. There was also massive migration of people from their countries to the new American and European cities. As a result of these movements from the rural farms and foreigners into America and Europe, there was a total disruption of the social engagement of the people. This was because of the mix-up of the numerous cultures of the people in the newly formed American and European cities (Gornick & Meyers, 2004). It formed a prominent need for these people to be able to interact due to their diverse backgrounds. Fortunately for these huge populations, their numbers called for a vibrant economy which left some workers and employees a frustrated lot as they faced exploitation and unjust working conditions. The reformers of the time identified this problem and created organizations which came to be known as labor unions. Their goal was to fight for the rights of all workers to have fair terms of employment. They also advocated for a balance between work and family. The unions also had the goal of seeking economic protection of workers. These unions provided workers with the sense of belonging to a group with common goals, a factor that also served to motivate them in their workplaces. As these unions continued to gain influence and recognition in America, they also began to make public issues that were once thought to be private. Such included the employment of women and children. The organizations helped draw the line between children helping their parents and families, and engaging them in laborious work for little or no pay. By the year 1910, there were clear laws in place regarding child labor and exploitation, the appropriate working hours, and unsafe practices in