IAS19 Assumptions Report
29 Jun 2017 - Estimated reading time: 20 minutes
FTSE350 companies support £900bn of defined benefit pension liabilities. These same companies have a combined market capitalisation of £2,500bn, so the way these liabilities are measured in company accounts is critical for assessing the financial wellbeing of UK plc.
The materiality of IAS19 pension assumptions is not lost on auditors, who are now assessing and challenging pension assumptions more than ever before. Setting appropriate IAS19 assumptions is therefore crucial for companies going through their year-end process.
This survey analyses the key assumptions adopted by the FTSE350 for their defined benefit pensions disclosures as at 31 December 2016. We consider the key financial assumptions (primarily the discount rate and inflation) and life expectancy.
Our analysis of the financial assumptions is based on 31 December 2016 disclosures to ensure all assumptions relate to the same market conditions. Our analysis of life expectancy covers all companies in the FTSE350 with defined benefit pension obligations (we have referenced the most recent company accounts).