Well defined pension guidance

Finance | 1 Jun 2005

The Charity Commission has published guidance on the impact of defined benefit pension scheme liabilities on charities' reserves policy. 'Final salary' pension schemes can affect charities' reserves policies and must be disclosed in charities' accounts, but the way in which this is done has been open to interpretation.

The guidance, developed jointly with CFDG looks at how these pension liabilities influence reserves policy and reporting. It also examines how requirements to fund pensions and the resulting cash flow implications impact on both charities' reserves and their risk management strategies.

Rosie Chapman, director of policy and strategy at the Charity Commission said: "The accounting requirements of the accounting standard have put the spotlight on the health of pension schemes generally. The balance sheet disclosure of pension assets and liabilities has raised questions as to how a charity's reserves policy will be affected. This guidance aims to give clarity on pension funding commitments within reserves policy statements."

Charity Reserves and Defined Benefit Pension Schemes is at www.charitycommission.gov.uk under Guidance for Charities.

Directory: Charity Commission | Charity Finance Directors' Group (CFDG)
Who's Who: Rosie Chapman

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