Actuarial Valuation of Pension Schemes: An Irish Perspective

McNally, Bridget; O’Connor, Thomas

doi:10.52399/001c.25495

Cited by 3 publications

(15 citation statements)

References 1 publication

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“…Although the application of 19 IAS possess far-reaching advantages for a firm and its employees, computational evidence from our results proves that the total service liability under the conditions of the current model is vanishingly zero. This presents a phantom effect detected in (McNally & O'Connor, 2013). However, our findings show that when the annuity factor is replaced by a life table annuity, the service liability does not vanish.…”

Section: Discussionmentioning

confidence: 57%

“…The 19 IAS model for pension liability computation has been presented in this study. The process of analysis utilized the model in (McNally & O'Connor, 2013). Although the application of 19 IAS possess far-reaching advantages for a firm and its employees, computational evidence from our results proves that the total service liability under the conditions of the current model is vanishingly zero.…”

Section: Discussionmentioning

confidence: 78%

“…The converse is also applicable where any excess of assets in the pension scheme that could reduce the employer's payments obligations in the future could be needed to be recognized as an asset in its financial statements. In (McNally & O'Connor, 2013), the International Accounting Standard No. 19 (IAS 19) requires internationally recognized guidance on accounting for and disclosure in financial statements of defined benefit pension obligations.…”

Section: Methodsmentioning

confidence: 99%

“…The salary data and demographic statistics of 25 employees were collected from the management office of a government institution in Jos North, Plateau state Nigeria. Analysis was performed using the international accounting standard IAS 19 model based on (McNally & O'Connor, 2013). The data was properly cleaned and free of possible errors to carry out full computation of the actuarial liability.…”

Section: Methodsmentioning

confidence: 99%

“…A surplus or deficit must be recognized as necessary as an asset or liability on the employer's balance sheet subject to certain conditions. In (McNally & O'Connor, 2013), the IAS 19, therefore, ensures the amount recognized in the sponsor's balance sheet as a defined benefit liability (deficit) or asset (surplus) to be the net total of the following amounts: (i) The present value of the defined benefit obligation at the balance sheet date plus (ii) any actuarial gains less any actuarial losses not yet recognized as income or an expense because of the smoothing afforded by the corridor approach less (iii) any past service cost not yet recognized and (iv) the fair value at the balance sheet date of plan assets out of which the defined benefit obligation is to be settled directly.…”

Section: Introductionmentioning

confidence: 99%

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Conditions for Pension Liability to Become Zero Under Certain Actuarial Assumptions Imposed On International Accounting Standard 19 Actuarial Model

Ogungbenle¹

2022

NJISS

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The international accounting standards employee benefits describe the accounting requirements for employee’s short-term, post-retirement, long-term and termination benefits. It further enshrines the principle that the cost of providing employee benefits should be recognized in the period over which benefits are earned by the employee and defines how each cohort of employee benefit is estimated. The objectives of this study are: (i) to estimate the liabilities of each members of the scheme under model (ii) to establish the mathematical condition under which the funding standard liability will be zero. This study applies the funding standard models for the computations of accruing liabilities for the current and past service liability of employees. Data in respect of different categories of employees was collected from a government institution in Jos North local government of Plateau state, Nigeria. The data includes the employee’s annual salary and their respective demographic statistics. This was used to obtain the number of years of pensionable service completed and the future years of services to be completed before retirement at the age of years. The study further employs life annuity table to compute the service liability of each member of the scheme. From our results, computational evidence proves that the total service liability of the plan will be vanishingly zero when certain mathematical annuity assumptions are imposed and hence this represents the condition for which the liability of the plan to the members to be zero.

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Section: Discussionmentioning

confidence: 57%

Section: Discussionmentioning

confidence: 78%

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Conditions for Pension Liability to Become Zero Under Certain Actuarial Assumptions Imposed On International Accounting Standard 19 Actuarial Model

Ogungbenle¹

2022

NJISS

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A Comparative Study of Immediate Annuities and Ordinary Annuities in establishing the Phantom of Zero Liability Under the Trusteeship Pension Valuation Structure

Michael

Oluseyi

2023

J. Bus. Mgt.

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Background: The liabilities of a pension scheme define the financial value to be paid at a definite period in the future. The underlying goal of pension plans is to provide retirees with sufficient stream of income to enable them to live a decent financially independent life post-employment period. The regulatory framework for occupational pension schemes necessitates the services of trustees as administrators who assume legal administrative responsibilities on the scheme and saddled to oversee actuarial valuations of the scheme's liabilities at definite points in time. Objectives: The objective of this paper is (i) to empirically examine the drivers of pension liability and how they are evaluated by the trustee’s model. (ii) Specifically, the study intends to use input parameters of the trustee model to establish the conditions for which the value of liability is zero under trusteeship annuity factor. Methods: This study applies trustees’ valuation model, the present values together with infinitesimal calculus. Salary data as well as demographic data were obtained from an agricultural production services company located in Jos-South, Nigeria. Results: Computational evidence from our results proves that the total service liability under the conditions of the current model is vanishingly zero. However, when the annuity factor is replaced by life table annuity, the service liability does not vanish. Conclusion: The total service liability obtained as zero therefore initiates inquiry as to whether this current valuation framework causes potential uncertainties for the pension trustees who are responsibly saddled with both administration and core decision-making responsibilities of the system.

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The Actuarial Conditions for the Valuation of Pension Liability to Become Zero Under Minimum Funding Standard Architecture

Ogungbenle¹,

Omede²

2022

Nep J. Math. Sci.

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Pension valuation exercises for a defined benefit scheme requires an appraisal of both the schemes assets and its liabilities in different circumstances. The valuations are required to comply with regulatory standards, most notably the minimum funding standard. The objectives of this study are: (i) to compute the estimate of minimum funding standard of pension liability (ii) to establish the actuarial condition under which minimum funding standard liability will be zero. This study used minimum funding standard models for the computations of accruing liabilities for the current and past service liability of employees. Data in respects of different categories of employees were collected over 36 employees from a going concern located in Jos South local government of Plateau State in Nigeria. The data includes the employee’s annual salary and their respective demographic data which includes sex, date of birth, date of employment. This was used to determine the number of years of pensionable service completed and the future years of services to be completed before retirement at the age of 65 years. The study also used life annuity table to compute the service liability of each member of the scheme. From the model used, the result shows that the total service liability of the plan will be vanishingly zero when the newly defined annuity component approaches zero hence this represents the condition for liability of the plan to the members to be zero.

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Actuarial Valuation of Pension Schemes: An Irish Perspective

Cited by 3 publications

References 1 publication

Conditions for Pension Liability to Become Zero Under Certain Actuarial Assumptions Imposed On International Accounting Standard 19 Actuarial Model

Conditions for Pension Liability to Become Zero Under Certain Actuarial Assumptions Imposed On International Accounting Standard 19 Actuarial Model

A Comparative Study of Immediate Annuities and Ordinary Annuities in establishing the Phantom of Zero Liability Under the Trusteeship Pension Valuation Structure

The Actuarial Conditions for the Valuation of Pension Liability to Become Zero Under Minimum Funding Standard Architecture

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