Plan assets
Plan assets are a term used in company pension schemes . It describes the assets that are available to cover pension claims of retired employees . In contrast to pension provisions , these plan assets are insolvency-proof.
background
So that benefits to retired employees can still be paid even if the employer becomes insolvent , they must be secured in some way. In Germany, pension obligations are secured through the Pensions -icherung-Verein . However, it is also possible to (additionally) structure certain assets (usually securities or reinsurance claims) in such a way that they are protected from third-party access (i.e. all but the beneficiary employees) in the event of insolvency. The amount of plan assets is determined according to actuarial principles.
Accounting
The requirements for "plan assets" differ according to the various standards.
IFRS
The International Financial Reporting Standards (IFRS) regulate the accounting of benefits from company pension schemes in International Accounting Standard 19 (IAS 19) Employee Benefits. IAS 19 (2011) .8 distinguishes between defined benefit and defined contribution plans. In the case of defined contribution plans, the employer pays in. All other pension plans are defined benefit plans. With them, the employer has to pay contributions to a third party who fulfills the obligation. The employer has no further obligations, in particular he is not liable if the assets made available to the third party are insufficient. All other plans are defined benefit plans. There is no need to have a formal plan. In the case of defined benefit plans, the employer must offset assets and liabilities from the plan and show the excess in his balance sheet.
- Reinsurance policies pledged to the employee,
- Assets that have been outsourced by way of a fiduciary solution , including a bilateral trust or contractual trust arrangement (CTA),
- Assets of a provident fund , insofar as they were not given as a loan to the sponsoring company In IAS 19.7, the following conditions are set for the recognition of plan assets (assets that can be offset):
- The assets are held by a unit that is legally independent from the company. * - This unit exists exclusively for the payment or financing of employee benefits.
- The assets are only available to pay or finance employee benefits.
- The assets are in front of the access of creditors of the reporting entity protected .
- The assets may only be repaid to the reporting company if this reimbursement relates to services already paid by the company (refinancing) or the remaining assets are sufficient to meet all performance obligations towards the employees.
Germany
In German commercial law , there is a general ban on offsetting , according to which assets and liabilities may not be offset against each other. However, the Accounting Law Modernization Act introduced the rule that assets that are not accessible to all other creditors and are used exclusively to meet debts from pension obligations or comparable long-term obligations are to be offset against these debts; The same applies to the associated expenses and income from discounting and from the assets to be offset. If the fair value of the assets in question exceeds the amount of the debts, the excess amount must be capitalized under a separate item ( Section 246 (2 ) HGB ).