Box 348, Commerce Court West
199 Bay Street, 30th Floor
Toronto, Ontario, Canada M5L 1G2
www.cba.ca
Marion G. Wrobel
Vice-President
Policy and Operations
Tel: (416) 362-6093 Ext. 277
July 25, 2013
International Accounting Standards Board
30 Cannon Street, 1st Floor
London EC4M 6XH
United Kingdom
Dear Board Members:
The Canadian Bankers Association[1] (the “CBA”) would like to thank the International Accounting Standards Board (the “Board”) for the opportunity to comment on the Exposure Draft ED/2013/4, Defined Benefit Plans: Employee Contributions (the “ED”). The ED clarifies the accounting for contributions from employees or third parties when the requirement for such contributions is set out in the formal terms of a defined benefit plan in IAS 19 Employee Benefits (“IAS 19”).
We are supportive of the ED and the Board’s proposed amendment to clarify that contributions from employees or third parties, when the requirement for such contributions is set out in the formal terms of a defined benefit plan, be recognized as a reduction in the service cost in the same period in which the contribution is payable if, and only if, they are linked solely to the employee’s service rendered in that period. This is consistent with current practice among the Canadian banks.
We also agree with the proposed clarification that contributions from employees or third parties that are not recognized as a reduction in the service cost in the same period in which they are payable (which is a negative benefit), should be attributed to periods of service in the same way that the gross benefit is attributed as outlined in paragraph 70 of IAS 19.
We agree with the specific questions proposed by the Board and have no further comments. We look forward to participating in future dialogue with the Board or its staff.
Sincerely,
2
[1] The Canadian Bankers Association works on behalf of 55 domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 275,000 employees. The CBA advocates for effective public policies that contribute to a sound, successful banking system that benefits Canadians and Canada's economy. The Association also promotes financial literacy to help Canadians make informed financial decisions and works with banks and law enforcement to help protect customers against financial crime and promote fraud awareness. www.cba.ca.