International Accounting Standards and ITP insurance with Alecta.
In March 2005, the Financial Accounting Standards Council’s Emerging Issues Task Force issued an authoritative statement that ITP insurance with Alecta should be reported as a defined contribution pension plan. Companies affected should thus in their annual accounts for 2004 report ITP insurance with Alecta as a defined contribution pension plan and provide the disclosures required by IAS 19/RR 29.
There were several reasons for this statement. One of the more central arguments from the Emerging Issues Task Force was that in view of the design of the ITP plan there are no opportunities to calculate surpluses or deficits within the plan and their possible impact on future premiums. When such conditions do not exist, companies must in accordance with RR 29 report the plan as defined contribution.
Reporting as a defined contribution plan
Taken overall, this means that ITP insurance with Alecta must be reported as a defined contribution plan as long as the basic design of the ITP plan is unchanged.