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December 2003

The Treatment of Pension Schemes in Macroeconomic Statistics

An Electronic Discussion Group

Last Updated: August 13, 2018

At the request of the Intersecretariat Working Group on National Accounts (ISWGNA), the IMF Statistics Department established an Electronic Discussion Group (EDG) on the treatment of pension schemes, including social security and unfunded employer pension schemes. The purpose of the EDG is to explore alternative ways of recording and to identify the most appropriate treatment of such pension schemes in macroeconomic statistical systems.

Reference documents:
As a starting point for the discussion, the following paper was prepared:
The Treatment of Pension Schemes in Macroeconomic Statistics (discussion paper), by John Pitzer, IMF, November 2002. (pdf file)

Contributions to this discussion are moderated and will not appear on the web until after the moderator has approved them.

Pension obligations or promises made by government, which have the potential of exerting pressure on government finance, have been the subject of increased focus in assessing medium-to long-term fiscal sustainability. In the accounting area, the International Federation of Accountants (IFAC) started work on the accounting treatment of government social policy obligations. These developments have led to a renewed interest in the question of how the activities of pension schemes should be recorded in macroeconomic statistics.

The System of National Accounts 1993 (SNA 1993), while making a distinction between social security schemes and employer insurance schemes, and among the latter between funded and unfunded schemes, often does not recognize pension obligations as liabilities of the schemes and financial assets of the beneficiaries respectively. This is notably true for many pension schemes set up by government units. The IMF's Government Finance Statistics Manual 2001 (GFSM 2001), however, recommends that that stocks of government liabilities for all employer schemes, both funded and unfunded, be recognized in the form of insurance technical reserves. It also recommends that contributions and benefits of government employer insurance pension schemes be recorded exclusively as financing transactions.

The discussions in this EDG resulted in a report that was presented in the February 2004 meeting of the Advisory Expert Group (AEG) on National Accounts. The AEG, which advises on the update of the 1993 SNA, welcomed the proposals to record pension obligations of unfunded employer retirement schemes and use sound actuarial principles for the valuation of pension arrangements. However, several caveats were made. The IMF presented further documents on employers' retirement schemes to the AEG in December 2004 and July 2005. In early 2005, the BEA and the IMF established a task force to address outstanding questions. Members of the task force are preparing discussion papers that will be posted on this EDG and that will be discussed at a September 2005 meeting. The task force will prepare a set of recommendations, on the basis of which the AEG is expected to come to final conclusions by early 2006. In the mean time, the EDG moderator welcomes your reactions.