UK court ruling could affect pension obligations
Filed under: Expenses, Compensation
KPMG reports on a recent UK High Court ruling that may increase pension obligations of companies that sponsor UK pension plans. The judgment aims to equalize pension benefits for men and women paid by UK defined benefit pension plans subject to the UK’s guaranteed minimum pension.
Applicability
Companies that sponsor UK defined benefit pension plans that were previously subject to guaranteed minimum pension accruals
Relevant dates
Effective immediately
Key impacts
- An October 26, 2018 UK High Court ruling
- Requires plans to equalize benefits for men and women to adjust inequality in the GMP formula from 1990 to 1997
- Provides a range of permissible equalization methods
- Requires plans to make back payments
- Companies should account for the impact of the ruling either as a plan amendment (prior service cost) or as an actuarial gain or loss (change in estimate)
- There are recognition differences between US GAAP and IFRS
Report contents
- Applicability
- Facts and impacts
- Background
- Plan amendment
- Actuarial gain or loss
- Disclosure requirements