|The objective of this paper is to raise the attention of national accountants on the necessity to review the recommendations of the SNA 1993 regarding the recording of public pension schemes, whether they concern the government as an employer or as the organiser of social security schemes. In many countries public pension schemes are reformed, in particular because of ageing population, sometimes creating mix systems that are difficult to analyse using present SNA 1993 categories. Also, public accounting bodies increasingly recommend treatments that are seemingly not consistent with the SNA, driving some OECD countries to depart, with solid arguments, from current SNA 1993 recommendations. The international comparability of national accounts is therefore impaired.
This paper is composed of four parts. The first discusses the recognition of liabilities for unfunded pension schemes and concludes that there is probably a case for a review of the SNA 1993 regarding the treatment of unfunded government employee pension schemes. The second discusses the sector classification issue and concludes that a review of the SNA 1993 would be necessary to ensure economically consistent classifications of public pension schemes across countries. The third discusses collateral implications on the international comparability of household saving rates, and poses the question of the "D8 adjustment" in the accounts. The fourth discusses the change that would occur on the figure for net lending/borrowing of the general government if changes were implemented in the SNA 1993 regarding unfunded general government employee pension schemes. This fourth part concludes first that the paragraphs of the SNA 1993 regarding imputed social contributions should be clarified and second that it is more than necessary to have consistent recording principles to obtain internationally consistent net lending/borrowing figures. Implementing the solution discussed in the first chapter, which is to treat all general government employee pension plans as if funded, would have the advantage of this internationally consistent recording for net lending/borrowing.
The paper uses the example of Canada to illustrate the issues. The author recognizes that one important limitation of the paper is that it does not extend more systematically its analysis to the case of other countries. It is probably only when having a view on a larger sample of concrete situations that one could start to give constructive recommendations for treatments that would ensure the international comparability of aggregates such as government net lending/borrowing or government total liabilities or household saving rates. However, the author considered that the present draft of the paper could already be of interest to participants in the EDG on pension schemes.
The author has found useful to add an appendix presenting some definitions drafted by the OECD task force on pension schemes, as the SNA 1993 /ESA 1995 uses many technical terms without sometimes defining them.
The paper reflects personal views and does not engage the responsibility of the OECD.
The author of this contribution to the discussion group on this site bears the sole responsibility for both the substance and the style of the contents. The purpose of the discussion group is to elicit comments and to promote debate on specific topics. As such, the views expressed on any of the issues raised are not to be attributed to the IMF.