Update on International Standard under IAS 19


By Catherine Robertson, FCIA

In October 2013, the International Actuarial Association (IAA) issued an exposure draft of proposed International Standard of Actuarial Practice 3 (ISAP 3) – Actuarial Practice under International Accounting Standard (IAS) 19 Employee Benefits.

As the name suggests, this is the third ISAP issued by the IAA. ISAP 1 deals with general actuarial practice, and was adopted by the IAA in November 2012. ISAP 2 applies to actuarial services performed in the context of social security programs, and was adopted by the IAA in October 2013. A fourth ISAP, dealing with actuarial practice in relation to insurance contracts, is currently being developed by the IAA.

This article reviews the content of ISAP 3 and summarizes the comments submitted by the CIA to the exposure draft in March 2014. The comments were prepared by the Subcommittee on International Pension and Employee Benefits Standards following the due process of the Committee on International Relations.

The IAA has defined the purposes of ISAP 3 as:

The focus of ISAP 3 is on services provided for a reporting entity’s preparation of IFRS financial statements, for any type of benefit the reporting entity determines to be covered by IAS 19. It addresses aspects of actuarial services in accordance with IAS 19, to the extent not covered in ISAP1, such as:

The IAA should be commended for the work involved in developing ISAP 3. For the most part it complements the actuarial standards of practice that currently exist in Canada on this issue. However, some particular issues identified in the CIA’s response to the exposure draft include:

It is easy to see that the ISAP will be of significant value in jurisdictions that have either have no standard or limited standards in place for actuarial services for IAS 19. However, similar to ISAP 1, it is more difficult to identify the value in Canada, where we already have extensive standards in place. That said, we look forward to a revised draft.

The draft IASP 3 can be found here and the CIA response will be available here soon.

Catherine Robertson, FCIA, is Chair of the Subcommittee on International Pension and Employee Benefits Standards of the Committee on International Relations.

Canadian Institute of Actuaries/Institut canadien des actuaires