Accounting Standards for Pension Plans

Improvements to Presentation and Disclosure of Investments for Pension Plans

Summary

The Accounting Standards Board (AcSB) has undertaken a project to improve presentation and disclosure of investments held by pension plans under Section 4600, Pension Plans, in Part IV of the CPA Canada Handbook – Accounting.

In June 2024, the AcSB issued the Exposure Draft, “Improvements to Presentation and Disclosure of Investments for Pension Plans.”

This project will involve:

updating the requirements for fair value disclosures;
introducing disclosure requirements on interests in investment vehicles; and
amending the presentation and disclosure requirements for investment expenses.

Staff Contact(s)

Shalini Gupta, CPA, CA Principal, Accounting Standards Board

+1 647 956 6628

[email protected]

Amanda Winter, CPA, CA Principal, Accounting Standards Board

+1 416 204 3241

[email protected]

Project Status

Information gathering

The AcSB conducted research and developed proposals to improve presentation and disclosure of investments held by pension plans
Approving project

In December 2023, the AcSB approved a project to develop an exposure draft
Engaging Communities

The AcSB issued its Exposure Draft, “Improvements to Presentation and Disclosure of Investments for Pension Plans,” in June 2024

Exposure Draft
Deliberating feedback

The AcSB is deliberating feedback on the Exposure Draft
Final pronouncement

On-demand Webinar – Domestic Accounting Standards Update (Fall 2024)

Watch our recorded webinar to learn about current projects and recent amendments in Parts II, III, and IV of the CPA Canada Handbook – Accounting.

This webinar aired live in November 2024 and is now available on-demand.

Watch now

On-demand Webinar – Domestic Accounting Standards Update (Spring 2024)

Watch our recorded webinar to learn about current projects and recent amendments in Parts II, III, and IV of the CPA Canada Handbook – Accounting.

English – On-demand webinar

French – On-demand webinar

News

April 11, 2024

Meeting, Webinar

Webinar – Domestic Accounting Standards Update (Spring 2024)

Are you a Canadian private enterprise, not-for-profit organization, pension plan, an advisor to one, or a user of their financial statements? Register for our upcoming webinar to learn about current accounting standards projects and recent amendments in Parts II, III and IV of the CPA Canada Handbook – Accounting. Join us on May 15, 2024 (English) or May 16, 2024 (French).

Meeting & event summaries

November 20, 2024

Pension Plan Advisory Committee Notes – October 28, 2024

The Pension Plan Advisory Committee discussed feedback on the AcSB’s Exposure Draft, “Improvements to Presentation and Disclosure of Investments for Pension Plans,” and potential solutions to address key issues raised through the AcSB’s outreach activities.

October 11, 2024

AcSB Decision Summary – September 17-18, 2024

The AcSB discussed its priorities in Part IV of the Handbook following completion of the current project on Improvements to Presentation and Disclosure of Investments for Pension Plans in mid-2025. The Board considered issues identified by its Pension Plan Advisory Committee over the past few years, as well as issues raised in comment letters to the 2022 Exposure Draft, “Pension Plans.” Following a series of narrow-scope amendments in recent years, the Board is now considering taking on a major project. In particular, the Board is considering a project on accounting by hybrid pension plans and other benefit plans, beginning with research. The Board will discuss this tentative direction with its Pension Plan Advisory Committee at the Committee’s October 2024 meeting.

April 2, 2024

AcSB Decision Summary – March 5-6, 2024

The AcSB reviewed a proposed exposure draft that would amend Section 4600, Pension Plans, to improve the presentation and disclosure requirements related to investments held by pension plans. The proposals seek to make improvements in three areas: to improve the presentation and disclosure requirements related to investments held by pension plans. The proposals seek to make improvements in three areas:

fair value disclosures;
disclosures on interests in investment vehicles; and
presentation and disclosure of investment expenses

January 12, 2024

AcSB Decision Summary – December 13, 2023

The AcSB discussed feedback received from its Pension Plan Working Group regarding investment presentation and disclosure matters in Section 4600 , Pension Plans. The discussion focused on proposed disclosure requirements on interests in investment vehicles and amended presentation and disclosure requirements on investment expenses.

The AcSB then approved a project proposal to amend Section 4600 to reflect these improvements as well as to update the requirements for fair value disclosures. The Board will explore and refine these proposals with the Pension Plan Working Group at its next meeting in February 2024.

October 12, 2023

AcSB Decision Summary – September 20-21, 2023

The AcSB discussed feedback from its Pension Plan Working Group regarding investment presentation and disclosure matters in Section 4600, Pension Plans.

The AcSB discussed options to improve the presentation and disclosure of investment expenses. The Board tentatively decided to require separate presentation of administrative expense categories between investment expenses and pension administration and other expenses. The Board also provided feedback on a proposed definition of investment expenses to be included in Pension Plans, paragraph 4600.05. The Board discussed options for disclosures related to investment expenses and tentatively decided that additional qualitative disclosure related to what is included in investment expenses would be useful to users.

In addition, the AcSB discussed ways to improve transparency on a pension plan’s interests in investment funds and other structured entities. The Board is considering introducing a principle-based requirement to disclose information that enables users to understand the nature and extent of a pension plan’s interests in these entities and the associated risks.

The AcSB will seek feedback on these potential solutions at its November 2023 Pension Plan Working Group meeting.

June 7, 2023

AcSB Decision Summary – May 24, 2023

The AcSB discussed feedback from the Pension Plan Working Group and research related to improvements to the disclosure of investment management expenses. The Board tentatively decided that improvements should be made to the disclosures related to investment management expenses in pension plan financial statements to increase transparency and comparability. The Board will seek additional feedback from the Pension Plan Working Group in July to obtain input on the nature of any proposed disclosures.

In addition, AcSB members discussed that pension plans commonly hold interests in investment funds and other structured entities. As such, the Board is considering whether it may be useful to introduce disclosure requirements to improve transparency in this area. The Board will seek more feedback on this matter, including potential solutions at its Pension Plan Working Group meeting in July 2023.

April 25, 2023

AcSB Decision Summary – March 8-9, 2023

The AcSB also discussed disclosures for buy-in annuity contracts. In December 2022, Section 4600 was amended to introduce new measurement and disclosure guidance specific to buy-in annuity contracts. Those amendments are effective for fiscal years beginning on or after January 1, 2024, with earlier application permitted. Following the amendments, buy-in annuity contracts would no longer be measured at fair value, but rather at a value equal to the related benefit obligation adjusted for amounts receivable under the annuity contract that are not collectible. For investments that are financial instruments, paragraph 4600.32 requires pension plans to provide the disclosures required by IFRS 7 Financial Instruments: Disclosures as well as the fair value disclosures required by the Appendix to Section 4600. The Board thinks that, once the amendments take effect, paragraph 4600.32 disclosures may become less useful for buy-in annuity contracts. The Board will seek feedback from its Pension Plan Working Group in April 2023 and consider whether to amend the disclosure requirement in paragraph 4600.32 to scope out buy-in annuity contracts.