Companies should begin to familiarize themselves with potential new pension disclosure rules proposed by the Canadian Securities Administrators(CSA), says a Mercer Communiqué.
For defined contribution(DC)plans, the proposals require the summary compensation table to include the value of actual and notional employer contributions, plus above-market or preferential earnings credited to non-registered DC plans.
A new column will be added to the summary compensation table for defined benefit(DB)plans to report “aggregate change in the actuarial present value” of each named executive officer’s and director’s accumulated benefit under both registered and non-registered DB plans.
“The proposed changes to the disclosure rules for defined benefit pension plans are expected to be among the more controversial in the CSA proposals because certain provisions do not make sense and differ materially from current practice that has emerged since the guidance provided by the CSA in 2005,” it states.
Significant changes to the proposals are unlikely as they are similar to the disclosure rules adopted by the Securities and Exchange Commission last year.
It will also be important to share the likely impact of the proposed retirement benefit disclosure rules with compensation committees, the Communiqué says.
“Depending on the nature of the plans in place, committees may need several sessions to analyze the impact of the new disclosure rules and to decide whether any plan design changes should be considered.”
The comment period on the proposals is open until June 30, 2007.
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