IASB October 2007

Classification of benefit promises

The Board continued its discussion of the definitions of benefit promises. The Board tentatively decided that the distinction between benefit promises should be based on the nature of the benefit promise in the accumulation phase only, and that classification should not be affected by longevity risk. The Board noted that the effect of longevity risk would be included in the measurement of the employer’s liability for such promises whatever the classification of the benefit promise.

Measurement of benefit promises in the payout and deferment phases

The Board tentatively decided that the liability for a benefit promise should be measured according to its classification, regardless of whether the employee is in the accumulation, deferment or payout phase.