Call for Papers–International Financial Reporting Standards in the North American Pension Plan Context
- Overview
The International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) are coming to North America. Implementation is slated for January of 2011 in Canada. In the United States, the SEC has issued a proposed road–map that calls for disclosures of financial statements using international standards to begin for the largest accelerated filers in 2014 (with earlier optional adoption under limited circumstances for very large registrants). All U.S. organizations could be required to report under international standards as soon as fiscal years ending in 2016.
IFRS will dictate a significant shift in actuarial thinking and practice, particularly in the U.S. Actuaries and their clients will have to become accustomed to working in a principle–based paradigm rather than in the rule–based environment with which they are familiar.
From the pension and benefit actuary's perspective, here are some of the key issues to consider under IFRS:
- Movement to a new accounting standard will require decisions on the part of the plan sponsor as to how they want to transition their accounting.
- IAS 19 takes a broad view as to what constitutes a long–term post–employment benefit plan. Actuaries may have to adjust their perspective as to the types of plans for which they will need to produce valuations and how those valuations are conducted.
- Plan amendments are amortized immediately for vested participants and over the vesting period for non–vested participants– a more rapid recognition than traditional local standards.
- An employer currently has a choice under IAS 19 as to the manner in which they will recognize actuarial gains and losses. This will change.
- The IAS places limits on balance sheet recognition, limiting any balance sheet asset that does not have economic value through an "asset ceiling".
- Triggers and accounting for special events like settlements, curtailments, and wind–ups may change versus current local accounting practice.
- In 2008, a Preliminary Views discussion paper produced by the IASB focused on potential changes to the current standard. The general tenor of the Preliminary Views is a movement away from many of the smoothing mechanisms that characterize current pension accounting practice.
- Who are the decision makers? Will Canadian and American authorities and business communities lose influence over the future of accounting standards?
The Pension Section's Communication Team has decided to focus the next Pension Forum (slated for publication in late 2009 or early 2010) on this important topic. The Pension Forum typically consists of three or four papers accompanied by brief discussions of each paper by experts in the field.
The Pension Section's Research Team, working with the Communication Team, is issuing this Call for Papers with the goal of soliciting new papers or identifying existing papers that are on an IFRS–related topic, are related to pension and benefit plans or are otherwise of value to pension and benefit actuaries, and are suitable for publication in the Pension Forum.
A secondary purpose of this Call for Papers is to solicit expressions of interest from individuals who are interested in writing a one– to four–page discussion of one of the papers that is ultimately accepted for publication.
Examples of IFRS–related subjects of interest might include:
- Many companies in Canada, the U.S., and elsewhere have either already transitioned or are in the process of transitioning to IFRS. What lessons have been learned from the experience of these transitions?
- How does operating in a principle–based environment differ practically from operating in a rule–based environment? Apart from the clear differences in the accounting statements, does the application and interpretation of those statements change when an employer operates in a principle–based environment? Is comparability of financial statements lost in a principle–based environment?
- Historical context–Where did IFRS come from and to where might accounting standards be expected to evolve over the next decade or two?
- What will be the impact of the transition to IFRS? How will employers respond? Will they manage their benefit plans differently? Will their commitment to benefit plans change? How will investors respond?
Papers can be, but need not be, technical. If papers are technical, they should not be overly detailed. Amongst other evaluation criteria, the review group will consider whether the paper can be expected to stand the test of time and to be of relevance and interest several years into the future.
- Desired Content for Papers
The Society of Actuaries' Pension Section Research Team is issuing this Call for Papers, inviting researchers, analysts, and other interested parties to perform quantitative research or to summarize their knowledge, thinking, and experience in the above area. The intent is to produce a body of work that will prove helpful to North American pension and benefit actuaries and actuarial students as they transition to the IFRS world, and to new generations of actuaries who must learn about IFRS in their professional development.
Authors may submit either original research or expository papers. The papers have no required minimum or maximum length. Papers that have already been written are welcome, as long as permission to print them in the Pension Forum can be obtained.
As a first step, prospective authors are asked to submit an abstract of the proposed paper or the full paper (if already written).
- Expressions of Interest from Discussants
The content of the Pension Forum typically includes both papers and discussions of those papers. As a result, there is a need for six to eight paper discussants. These individuals will read one of the accepted papers and draft a one– to four–page discussion of the paper for publication in the Pension Forum as an accompaniment to the paper. The discussion can focus on the strengths and weaknesses of the paper, can expand on subjects raised by the paper, or can point to areas that require further thinking or research.
Individuals interested in acting as discussants are asked to submit a brief letter summarizing their qualifications in the area. Although authors of papers are not precluded from acting as discussants for other papers in the Pension Forum, the selection committee will grant preference to discussants who are not also authors.
- Procedure for Submission of Abstracts or Discussant Expressions of Interest
Please submit an abstract or outline of your proposed paper, or a full copy of your completed paper, by April 30, 2009 to:
Barbara Scott
f: 847.273.8592
e–mail: bscott@soa.org
At a minimum, an abstract submission should include a brief description of the subject of the paper, a list of key items to be covered and a biographical paragraph containing the author's experience, prior publications and presentations, and contact information. The author should include confirmation of their ability to complete the proposed paper by August 31, 2009 at the latest.
Expressions of interest to act as a discussant should also be sent to Barbara Scott at bscott@soa.org by April 30, 2009, and should contain a brief paragraph outlining the individual's experience and expertise in IFRS. We anticipate that selected discussant applicants will be asked to write their discussions during September of 2009.
- Procedure for Reviewing Abstracts
Submitted abstracts and papers, and discussant applications, will be evaluated by a review group consisting of members of the Pension Section's Research and Communication Teams. Submissions will be evaluated for their suitability for the IFRS–themed issue of the Pension Forum.
Abstract submissions will be accepted, accepted subject to revision, or declined. The review group is scheduled to complete its evaluation of the abstracts/outlines by May 31, 2009.
It is anticipated that no more than four papers will be published in the Pension Forum. If the quality of submissions is such that a larger number of papers may be worthy of publication, then an on–line monograph may be produced to give exposure to the papers that cannot be included in the print version of the Pension Forum.
- Submission of Papers
If an abstract is accepted, the associated paper must be completed by August 31, 2009. All papers must be based on accepted abstracts. Completed papers that have a copyright must be accompanied by written permission to reprint.
All papers should be sent to Barbara Scott at bscott@soa.org by the above deadline. They should be submitted as a Word document. Further details related to formatting, footnotes, table layout, etc. will be provided at a later date.
- Publication and Presentation
The review group, after receiving all submissions, will determine which papers will be included in the next issue of the Pension Forum. Decisions will be based not only on the stand–alone suitability of each paper, but also on how the three or four selected papers will fit together to provide appropriate coverage of the IFRS topic.
Authors of accepted papers may be invited to present their papers at an SOA–sponsored symposium or meeting.
Upon request, authors will be granted permission to submit their papers to other publications provided that the Society of Actuaries can maintain the right to publish the papers.
The Society of Actuaries reserves the right to publish all papers and to copyright all published papers without a previous copyright. In addition, excerpts or synopses of the papers may be published for promotional purposes.
The Society of Actuaries reserves the right to reject or not publish any papers not meeting the criteria and standards of the review group.
- Questions
Please direct questions regarding this Call for Papers to:
Steven Siegel, Research Actuary
Society of Actuaries
ph: 847.706.3578
f: 847.273.8578
e–mail: ssiegel@soa.org