Post-employment benefits
Examples include retirement pensions and post-employment medical benefits. IAS 19 classifies post-employment plans as defined contribution or defined benefit according to their economic substance. Accounting differs: defined contribution plans generally recognise contributions for service, while defined benefit plans require actuarial measurement of the obligation and plan assets, subject to relevant rules. Benefits can be provided through formal or informal arrangements.
Worked example
An employer contributes a fixed amount to a pension fund with no further legal or constructive obligation. The arrangement is a defined contribution post-employment plan if the IAS 19 definition is met.
Common mistake
Assuming all post-employment benefits are defined benefit plans, or assuming the name of a pension arrangement determines its accounting.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBR | Direct | September 2026–June 2027 |