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Public Sector Accounting Standards

Re-exposure Draft, “Employee Benefits, Proposed Section PS 3251”

Summary

The Public Sector Accounting Board (PSAB) proposes, subject to comments received following re-exposure, to issue a new standard, Section PS 3251, Employee Benefits. This Section would replace Section PS 3250, Retirement Benefits, and Section PS 3255, Post-employment Benefits, Compensated Absences and Termination Benefits. Proposed Section PS 3251 would apply to public sector entities that base their accounting policies on the CPA Canada Public Sector Accounting (PSA) Handbook.

This Re-exposure Draft uses the principles from International Public Sector Accounting Standard (IPSAS) 39, Employee Benefits, as a starting point. In developing the July 2021 Exposure Draft, “Employee Benefits, Proposed Section PS 3251,” PSAB amended IPSAS 39 principles that were considered either contrary to the Board’s Conceptual Framework for Financial Reporting in the Public Sector or inappropriate for application in Canada based on the Canadian public interest.

This Re-exposure Draft includes further amendments to discount rate proposals that are considered to be in the Canadian public interest, in response to feedback to the July 2021 Exposure Draft.

Staff Contact(s)

Michael Puskaric, MBA, CPA, CMA Director, Public Sector Accounting Board

Phone number  +1 416 204 3451
Email address  [email protected]

Background

Current standards in the PSA Handbook on retirement benefits, post-employment benefits, compensated absences, and termination benefits were developed more than two decades ago. Since then, there have been many changes in the accounting world and pension plans have continued to evolve. 

This Re-exposure Draft outlines proposals for proposed Section PS 3251. Overall, respondents supported the main features of the July 2021 Exposure Draft. Accordingly, many principles of the Re-exposure Draft remain substantially unchanged from when they were previously exposed in July 2021. In response to feedback to the July 2021 Exposure Draft, PSAB determined that amendments to the proposals related to discount rate for defined benefit plans were in the Canadian public interest. The Board’s due process requires limited re-exposure, and we want your feedback on our proposed amended features.

Due to the phased approach of starting with IPSAS 39, principles or definitions within this Re-exposure Draft that relate to the topics of risk-sharing and non-traditional plans may be deliberated by PSAB during a future phase of the project. The Board may revisit some of the principles or definitions in this Re-exposure Draft during future phases. Our objective with this Re-exposure Draft is to finalize the core principles for discount rate guidance and deferral provisions.