...Commentary www.cdhowe.org No. 250 June 2007 ISSN 0824-8001 C.D. Howe Institute The Pension Papers Ill-Defined Benefits: The Uncertain Present and Brighter Future of Employee Pensions in Canada David Laidler and William B. P. Robson In this issue... Attempts to shore up the classic single-employer, defined-benefit pension plan are the wrong response to Canada’s occupational pension problems. While tax and regulatory changes can help, Canadians need a new approach to retirement income that will pool risks, control costs, and avoid the agency problems that have put many pension promises at risk. The Study in Brief The problems of employer-sponsored defined-benefit (DB) pension plans in Canada raise two issues: the need for short-run measures to limit the damage; and the need for new pension models to prevent their recurring. The DB sector’s immediate preoccupations are the result of changes in the economic environment — in particular, a decline in long-term interest rates — that caused their balance sheets to deteriorate, and of changes in accounting standards to more market-based methods that revealed the underfunded state of these plans in stark form. The immediate policy challenge is to ensure the recovery and/or restructuring of sick plans, and the continued health of sound ones. Extra time and financial scope to work off deficits are good, but current limits on contributions to plans should rise or disappear, while legislation to establish clear title...
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...MFRS 119 Employee Benefits MFRS 119 define employee benefits as to prescribe the accounting and disclosure by employers for employee benefits. Thus, it replaces MASB Approved Accounting Standard IAS 19 Accounting for Retirement Benefits in the Financial Statements of Employees. The major changes from old IAS 19 are set out in the Basis for Conclusions. The Standard does not deal with reporting by employee benefit plans (see FRS 126 Accounting and Reporting by Retirement Benefit Plans ). From MFRS 119, there are four categories of employee benefits to be identified which are: (a) short-term employee benefits, such as wages, salaries and social security contributions, paid annual leave and paid sick leave, profit-sharing and bonuses (if payable within twelve months of the end of the period) and non-monetary benefits (such as medical care, housing, cars and free or subsidised goods or services) for current employees; (b) post-employment benefits such as pensions, other retirement benefits, post-employment life insurance and post-employment medical care; (c) other long-term employee benefits, including long-service leave or sabbatical leave, jubilee or other long-service benefits, long-term disability benefits and, if they are payable twelve months or more after the end of the period, profit-sharing, bonuses and deferred compensation; and (d) termination benefits. 3.1 Accounting Policy Used on MFRS 119 Employee Benefits for AZRB AZRB act or implement the employee benefits...
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...Figures Appendices Abbreviation CHAPTER ONE: INTRODUCTION 1.0. 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. Background of the Study The Conceptual Basis of Social Security Schemes The Kenyan Contextual Basis of Social Security Problem Statement Research Questions and Objectives Research Hypotheses Importance of the study 1 3 10 19 22 22 23 CHAPTER TWO: LITERATURE REVIEW 2.0. Introduction 2.1. Review of Theoretical Literature on Financial Viability of Pension Schemes 2.2. Review of Empirical Literature of Studies on the Solvency of Pension Schemes 2.3. Models for Evaluating the Financial Viability of Pension Schemes 2.4. A Summary of the Knowledge and Research Gaps 25 25 46 60 68 REFERENCES APPENDICES i Electronic copy available at: http://ssrn.com/abstract=1784297 GLOSSARY CAC CALPERS CAPSA CBS C-D CEO CGE CSR DB DC E.T.I EME ERISA FMA GASB GDP GSP INPFRS INSS IPD IRA IRBS KNAO KNBS LUPFUND NSE NSSF NYSCRF OECD OSFI PBGC PLC PPF PPR PROST PRPOPS PSPS PSSS RBA SAM SIPO SOX SSNIT SSS Commonwealth Authorities and Companies Act CEO California Public Employees Retirement System The Canadian Association of Pension Supervisory Authorities Central Bureau of Statistics Cobb-Douglas economy Chief Executive Officer Computable General Equilibrium Corporate Social Responsibility Defined Benefit Defined Contribution Economically Targeted Investments Emerging Market Economies Employee Retirement Income Security Act Financial Management and Accountability Act Government Accounting Standards Board Gross...
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...What is Corporate Portfolio All of the assets included on the firm's balance sheet. For example, a real estate trust holds a portfolio of office rental properties. Also called investment portfolio. See also diversification Corporate Philosophy Markets are efficient The design of the portfolio as a whole should be more important than the selection of any particular security within the portfolio. The general rule is that Investors are risk averse. For a given risk level, an optimal combination of asset classes will maximize returns. Investment Style Passive Vehicle Style of investment Active Vehicle Investment Style Horizon (Long term Investment ) Life-cycle (often used in retirement plans) Asset Allocation Equities Growth Fixed Income Investments Capital Preservation Asset Allocation Asset-allocation is an attempt to provide investors with portfolio structures that address an investor's age, risk appetite and investment objectives with an appropriate apportionment of asset classes. Balance Fund Life-cycle (often used in retirement plans) Active Asset Selection Active asset selection strategies can be classified fairly broadly into four classes – Intrinsic valuation model relative valuation model technical analysis models Portfolio Optimization model How to Rebalance Your Portfolio Businesses are constantly assembling and adjusting their portfolios of assets in an attempt to increase the returns they earn and reduce the risks they face. For...
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...Rodgers Western Governors University The Progressive Path: A New Approach for the Modern Student Recent college graduate…in debt. Early to mid-twenties…in debt. No retirement or emergency savings…in debt. Minimal work experience…in debt. Too many Americans are subject to this common denominator…in debt. For far too long we have become accustomed to the monotony and strenuous financial burden of at least four years of college immediately following four years of high school. At times, this may be a wise path for a student to follow but we as a society need to take a step back to analyze whether or not this truly is the best path in the long run. According to Barbara King (2015), an assistant professor of mathematics at Florida International University, when she collected data pertaining to 1,947 students majoring in Life Science, Business, Social Science, Education, Humanities, and Physical Science/Engineering, she found that 37% of them switched their major, thus delaying their graduation and increasing their debt obligation. Any student planning on taking full responsibility for their tuition should consider delaying enrollment in higher education after high school to make way for an entry-level position because they are more likely to graduate with a lower debt obligation, they will enjoy a more bountiful retirement, and they will most likely be both financially literate and free. By delaying enrollment, a high school graduate can apply for an entry-level position at a company...
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...requirements, their effect on the financial statements, and the significance of each type of pension plan. It will also examine the positive and negative implications of each of the pension plans. Defined Benefit Pension Plan - A defined benefit plan is a retirement plan set up to pay a fixed annual amount to eligible employees during their retirement. It is called defined benefit because the quarterly or annual contribution is based upon an actuarial determination of what the participants' retirement benefits should be, not on profits. The formulas look at how much money must be contributed in order for there to be enough money to pay a FIXED amount of benefit(s) to recipients in the future. These projections use a reasonable expected rate of return (401kpsp.com, 2012). Defined Contribution Plan- A defined contribution plan is a retirement plan that requires that an individual "account" be set up for each participant in the plan. It is called "defined contribution" because a participant can only contribute a fixed maximum amount to the plan each year. The contributions are not based on the expected retirement benefit, but rather on a percentage that is specified in the plan (401kpsp.com, 2012). Other Post-Retirement Benefits- The benefits that fall within this category are of the non-cash payment benefits available to employees, including dental, vision care, legal services, and tuition credits. These additional benefits, along with traditional pension benefits...
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...Chapter 10 Operational Assets: Acquisition and Disposition Questions for Review of Key Topics Question 10-1 The term operational asset is used to describe the broad category of long-lived assets that are used in the production of goods and services. The difference between tangible and intangible assets is that intangible assets lack physical substance and they primarily refer to the ownership of rights. Question 10-2 The cost of an operational asset includes the purchase price (less any discounts received from the seller), transportation costs paid by the buyer to transport the asset to the location in which it will be used, expenditures for installation, testing, legal fees to establish title, and any other costs of bringing the asset to its condition and location for use. Question 10-3 The cost of a developed natural resource includes the acquisition costs for the use of land, the exploration and development costs incurred before production begins, and the restoration costs incurred during or at the end of extraction. Question 10-4 Purchased intangibles are valued at their original cost to include the purchase price and all other necessary costs to bring the asset to condition and location for use. Research and development costs incurred to internally develop an intangible asset are expensed in the period incurred. Filing and legal costs for both purchased and developed intangibles are capitalized. Question 10-5 ...
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...| Alaska Air Group and Southwest Airlines Co. | | 2/11/2012 | Introduction For the purpose of this paper, Alaska Air Group (ALK) is the subject of the primary financial analysis with the majority of comparisons made against Southwest Airlines Co (LUV). For financial purposes, the airline industry falls under the transportation sector, consisting of airlines, railroad, and trucking and characterized by the movement of people and products. For the purpose of this analysis, comparable airline carrier ratios are used. An enhanced look into the specifics of Alaska and Southwest’s financial statements and accounting methods explain their positioning in the airline industry and reflect their performance in recent years. Activities Alaska Airlines reported record earnings for the year 2010, with a $203 million improvement from 2009. A 9.8% increase in passenger traffic over the previous year drove the revenue increase (Alaska Air Group, Inc., 2011). Alaska also led the ten largest carriers in on-time performance for the year. For the third year in a row, it ranked highest in customer satisfaction among traditional network carriers, as listed by J.D. Power and Associates (Alaska Air Group, Inc., 2011). Challenges * The safety and financial results could be harmed in the event of an accident or incident * Changes in government regulations or restrictions could drive operating costs up * Security concerns related to the airline industry as...
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...Relations > Deloitte Foundation Global site selector Go Search Search Top searches Top searchesBookmark Email Print this page Increase font Alliances Catalyst for Innovation Community Involvement Corporate Responsibility Deloitte’s sponsorship of the U.S. Olympic Committee Inclusion Deloitte University Ethics & Independence Deloitte Life Growth Through Acquisition History Investor Confidence Leadership University Relations Deloitte Foundation Faculty Resources Faculty and Ph.D. Support Life, Inc. Student Events The Trueblood Case Studies DOWNLOAD For a complete index of Cases and Addendum summary please click the download button above. The Trueblood Series cases and solutions are available in Adobe PDF format below. Solutions are password protected for faculty use only. Access to solutions by other unauthorized individuals is strictly prohibited. To find out how to obtain access to the case solutions, please contact us via e-mail or mail a request on your school letterhead to: Deloitte Foundation Ten Westport Road Wilton, CT 06897 Due to the...
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...and|Definition | | |3 with your own |Acquisition of PP&E: | | |material here, or |General | | |throughout as |Self-constructed assets | | |desired |Interest costs during construction | | | |Initial cost of natural resources | | | |Valuation at acquisition: | | | |Exchange of non-monetary assets | | | |Lump-sum purchases | | | |Deferred payment contracts | | | |Purchase paid for using company stock ...
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...Inventories Cash Flow Statements Contingencies and Events Occurring After the Balance Sheet Date Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Depreciation Accounting Construction Contracts Accounting for Research and Development (Not Applicable now) Revenue Recognition Accounting for Fixed Assets Accounting for the Effects of Changes in Foreign Exchange Rates Accounting for Government Grants Accounting for Investments Accounting for Amalgamation Accounting for Retirement Benefits in the financial Statements of Employers Borrowing Costs Segment Reporting Related Party Disclosure Leases Earning Per Share Consolidated Financial Statements Accounting for Taxes on Income Accounting for Investments in Associates in Consolidated Financial Statements Discontinuing Operations Interim Financial Reporting Intangible Assets Financial Reporting of Interests in Joint Ventures Impairment of Assets Provisions, Contingent Liabilities & Contingent Assets Procedure for Issuing Accounting Standards Accounting Standard Board (ASB) determines the broad areas in which Accounting Standards need to be formulated. In the preparation of AS, ASB is assisted by Study Groups. ASB also holds discussions with representative of Government, Public Sector Undertakings, Industry and other...
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...CASE STUDY 8.1 PG 287 Disclosure of environmental liability By Lindene Patton C.I.H, Senior Vice President and Counsel, Zurich Around the world, companies are being required to meet higher levels of disclosure of environmental liability … in the United States, for example, the US Financial Accounting Standard Boards (FASB) issued provisions in 2002 for accounting for environmental liabilities on assets being retired from service. The provision for accounting for assets retirement obligations required companies to reserve environmental liabilities related to the eventual retirement of an assets if its fair market value could be reasonable estimated. The intent of the ruling was disclosure, but the conditional nature of estimating of fair market value caused corporations to take the position that they could defer their liability indefinitely by ‘mothballing’ a contaminated property. Companies effectively postponed the recognition of the environmental liabilities in the absence of pending or anticipated litigation. Earlier this year, FASB clarified its intention by providing an interpretation that said companies have a legal obligation to reserve for environmental and other liabilities associated with the eventual retirement of manufacturing facilities of parts of facilities, even when the timing or method of settlement in uncertain. Among examples given by FASB: * An asbestos-contaminated factory can not simply by ‘mothballd’ without adequate reserves to cover the eventual...
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...Section 2 Instructor Anne Hacker February 21, 2010 Table of Contents The City of Miami……....……………………..………………………………………………….1 The City of Miami vs. Gates Case………………………………………………………………..2 The retirement systems………………………...………………………………………………….2 The Research Question………..…………………………………………………………………..4 Stakeholders…………………………………...…………………………………………………..5 Ethical Issues…………………………..….………………………………………………………8 Data Gathering Methods….……………………………………………………………………..10 Data Analysis…….……………..………………………………………………………………..12 Conclusions and Recommendations.…………………………………………………………….13 Annotated Bibliography………………………………………………………………………… Pension costs draining Miami In 1896, the City of Miami (the “City”) became the first city to be incorporated in Miami-Dade County. It is the largest of 35 local municipalities within the County; has an estimated population of 404,048 people; and has a land area of 35 square miles (US Census Bureau, 2006). Miami employs 3,408 full-time positions and several hundred part-time positions (Miami, 2010, p.73). The City of Miami has three single-employer defined benefit pension plans: The City of Miami Firefighters’ and Police Officers’ Retirement Trust (FIPO); the City of Miami General Employees’ Retirement Trust (GESE); and the City of Miami Elected Officers’ Retirement Trust (EORT). With the exception of the EORT, participants in the FIPO and GESE pensions are required to contribute minimum percentages of their salaries. The City of...
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...GASB 68: An Examination of Affects to the Pension Problem Including Stakeholder Interests Private retirement systems are regulated by the Pension Benefit Corporation (Employee Retirement Income Security Act of 1974); state and local governments are not subject to federal regulation but rather voluntarily comply with GASB standards. (Mattrell, 2013) With all the newsworthy stories involving public pensions, analysts were becoming increasingly critical of GASB regulation over the pension systems. When compared to the requirements of the private retirement systems, it was lacking in transparency. Thus, GASB replaced statement 27 with 68. Government entities with a financial period ending June 30, 2015 will be first to experience the implementation of GASB 68. Many feel that GASB 68 is part of the solution for the ever-increasing public pension crisis in the United States but is reporting for the first time ever in most cases a rather large Net Pension Liability (NPL) on the face of the financials going to solve the problem of underfunded pensions. Employees within the public sector generally enjoy a rather generous pension when compared to others but when they are looked at for their sustainability they fail miserably. Chicago retirement system for teachers, fire fighters and others us underfunded by nearly $24 billion, with residents facing potential 150% increase in property taxes. (Birrer, 2014) Public pension systems in the United States are in need of change if they...
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...PRADESH TABLE OF CONTENTS Chapter No. Subject Page No. Ch No.1 Executive Summary…………………. 6 Ch No.2 Research Methodology……………… 7 2.1 Primary Objective(s)…………. 2.2 Hypothesis…………………… 2.3 Research Design……………… 2.4 Sample Design……………….. 2.5 Scope of the Study……………. 2.6 Limitations……………………. Ch No.3 Critical Review of Literature……….. 9 Ch No.4 Company Profile ……………………. 18 Ch No.5 Industry Profile……………….. 21 Ch No.6 SWOT Analysis…………………. 45 Ch No.7 Data………………………………….. 46 7.1 Collection……………………… 7.2 Primary Data…………………… 7.3 Secondary Data….…………….. Ch No.8 Working Capital- Overall View……… 53 Ch No.9 Findings & Analysis…………………. 100 Ch No.10 Recommendations…………………… 112 Ch No.11 Bibliography…………………………. 114 Ch No.12 Annexure…………………………….. 115 12.1 Tables…………………………. 12.2 Graphs………………………… Ch No.13 Case Study...…..................................... 117 Ch No.14 Synopsis of the Project………………. 122 CH NO.1: EXECUTIVE SUMMARY The Indian Life Insurance Company has seen a remarkable shift since the time of establishment of the first company, Oriental Life Insurance Company in 1823. At the time of Independence and thereafter...
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