Pensions lobby attacks changes

By: Jill Treanor
The Guardian, Thursday November 30, 2000

A three-year delay in the introduction of new accounting rules for company pensions has failed to placate investors who believe the new Accounting Standards Board rules will inject too much volatility into company's profits and disadvantage pensioners.

The ASB is today publishing rules which require companies to disclose more information about their pension schemes and the effect changes in world market will have on the value of the assets.

The ASB is not requiring the rules to be fully introduced until 2003, but asks that companies start to insert notes on the impact of the change into their annual reports from next June onwards.

Alan Pickering, chairman of the National Association of Pension Funds, said: "The longer it is delayed the better."

He is concerned that pension fund managers will try to avoid injecting volatility into accounts by taking more conservative investment decisions which might be less lucrative for pensioners. He also believes that companies may be discouraged from increasing benefits to their pensioners.

Yet while the NAPF remained opposed to the new rules - which have also attracted the attention of Guardian Media Group chairman Paul Myners, who is heading the government review into pension fund investment - other bodies welcomed the delay. Actuaries Bacon & Woodrow said the delay could turn "disaster into success".

She said the decision to delay the new rules was a consequence of the controversy they had evoked, but for three other reasons. First, to prevent pension funds having to under take new evaluations of their schemes; second to give the ASB time to lobby for changes to international standards; and third, to give companies the opportunity to start preparing accounts in line with the new rules.