Government Finance Statistics Manual 2014

120 Government Finance Statistics Manual 2014

may be considered as being protected against various

specifi ed needs or circumstances, even though no re-

serves are built up to provide for future entitlement to

benefi ts. Compensation of employees in the form of

employers’ social contributions equal in value to the

amount of social contributions that would be needed

to secure the de facto entitlements should be imputed.

Th ese amounts take into account any actual contri-

butions made by the employer or employee and de-

pend not only on the levels of the benefi ts currently

payable, but also on the ways in which employers’ li-

abilities under such schemes are likely to evolve in the

future as a result of factors such as expected changes

in the number, age distribution, and life expectancies

of their present and previous employees. Th us, the

values that should be imputed for the contributions

ought, in principle, to be based on the same kind of

actuarial considerations that determine the levels of

premiums charged by insurance enterprises.

6.24 In practice, however, it may be diffi cult to decide

how large such imputed contributions should be. Th e

government sector unit may make estimates, perhaps

on the basis of the contributions payable into similar

funded schemes, in order to calculate its likely liabili-

ties in the future, and such estimates may be used when

available. Otherwise, the only practical alternative may

be to use the unfunded nonpension benefi ts payable by

the unit during the same reporting period as an esti-

mate of the imputed expense that would be needed to

cover the imputed contributions (see paragraph 6.104).

Imputed employers’ social contributions to employment-related pension benefi ts

6.25 Th e imputation of employers’ social contribu-

tions related to employment-related pension benefi ts

is infl uenced by the type of pension scheme the gov-

ernment unit operates:

• In general, in the case of social security schemes,
  there are no imputed contributions recognized
  for social insurance. However, in cases where
  employment-related pensions are administered
  by such a social security scheme, imputed con-
  tributions should be recorded for these pension
  obligations.


• For a defi ned-contribution pension scheme, there
  are no imputed contributions recognized unless
  the employing unit operates the scheme itself. In
  that case, the value of the costs of operating the

scheme is recorded as an imputed contribution

payable to the employee as part of compensation

of employees.

• For a defi ned-benefi t pension scheme, there is
  an imputed contribution recognized, equal to
  the increase in benefi ts payable due to current
  period employment, plus the costs of operating
  the scheme, minus the sum of the government’s
  actual contribution and the sum of any contribu-
  tions by the employees.^14
  6.26 Some schemes may be generally described as
  noncontributory because no actual contributions are
  ever made by the employee. Nevertheless, in the case of
  employment-related schemes, an imputed contribution
  by the employer is calculated and should be imputed for
  GFS as just described. Th e fact that the value of imputed
  contributions for a noncontributory scheme may be set
  equal to the value of benefi ts payable does not mean
  that the benefi ts themselves are recorded as part of
  compensation of employees. Rather, the employee has a
  pension asset that is reduced when benefi ts are payable.
  When a pension manager is a unit diff erent from the
  administrator, and the responsibility for any defi cits, or
  claims on any excess rests with the pension manager,
  the counterpart entry for such claims is included in im-
  puted social security contributions on a net basis (i.e.,
  an expense to increase the liability and a reduction in
  the expense when the liability reduces or when govern-
  ment acquires an asset. See paragraph 7.199).

Use of Goods and Services (22)

6.27 Use of goods and services (22) consists of the

value of goods and services used for the production

of market and nonmarket goods and services.^15 Ex-

cluded are:

• Consumption of fi xed capital (23)


• Th e use of goods and services in own-account
  capital formation, which should be recorded as
  the acquisition of nonfi nancial assets (see para-
  graph 8.3)

(^14) Some defi ned-benefi t pension schemes may have fi nancial as-
sets that exceed the liabilities of the scheme to present and past
employees. It is possible that in this case, the government may take
a “contribution holiday” and not make actual contributions for one
or more periods. Nonetheless, an imputed contribution by the gov-
ernment should be calculated and recorded (see paragraph A2.46).
(^15) Use of goods and services is closely related to intermediate
consumption in the 2008 SNA. Th e relationship between the two
concepts is explained in Appendix 7. Intermediate consumption
is described in the 2008 SNA, paragraphs 6.213–6.239.