The Balance Sheet 201
either their employer or a fund designated by the em-
ployer, to pay pensions earned as part of a compensa-
tion agreement between the employer and employee.
Th e nature of these claims, and the corresponding li-
abilities of the units operating the pension funds, de-
pends on the type of benefi t promised.
7.191 Th e two main types of pension schemes are
defi ned-benefi t schemes and defi ned-contribution
schemes.^56 In a defi ned-benefi t scheme, the level of
pension benefi ts promised by the employer to par-
ticipating employees and other family members is
determined by an actuarial formula based on par-
ticipants’ length of service and salary. In a defi ned-
contribution scheme, the level of contributions to
the fund is set, but the benefi ts that will be payable
depend on the assets of the fund.
7.192 A pension fund for public sector employ-
ees can be managed on behalf of the public sector
unit by a public or private insurance corporation, or
it can be organized and managed by the public sec-
tor unit as an autonomous or nonautonomous pen-
sion fund. A nonautonomous pension fund is not a
separate unit and the assets of the fund belong to the
employer. Th e employees have a claim against the
employer who operates the nonautonomous fund,
and the employer has a liability equal to the present
value of the promised benefi ts. For a description of
the typology of social protection arrangements, see
Appendix 2.
7.193 Th e liabilities of unfunded pension schemes
should also be included in pension entitlements. By
its nature, an unfunded employment-related pension
scheme must be organized and managed by the em-
ployer, which may be a general government unit or a
public corporation.
7.194 No liability is recognized in the primary
accounts of macroeconomic statistical systems for
benefi ts under social security schemes.^57 Th e implicit
obligation for future social security benefi ts are re-
ported as a memorandum item to the balance sheet
(see paragraph 7.261), regardless of the level of assets
in a social security fund or other segregated accounts.
Liabilities for the payment of social security benefi ts
(^56) Defi ned-benefi t schemes are sometimes referred to as “fi nal sal-
ary schemes,” while defi ned-contribution schemes are sometimes
referred to as “money-purchase schemes.”
(^57) Social security schemes are defi ned in paragraphs 2.100–2.102.
that were due to be paid but have not yet been paid are
classifi ed as other accounts receivable/payable (6308,
6318, 6328). If a social security fund also administers
an employment-related pension scheme, those pen-
sion obligations are included under pension entitle-
ments, and not as implicit social security obligations.
7.195 As well as pensions, some employment-
related schemes may have other related liabilities,
such as for health benefi ts, which are included under
entitlements to nonpension benefi ts.^58 Liabilities for
these nonpension entitlements are recorded in mac-
roeconomic statistics only when and to the extent that
they exist in the employer’s accounts—that is, when
reserves for these nonpension entitlements actually
exist. For pragmatic reasons, such liabilities for non-
pension entitlements may be included with those for
pension entitlements.
7.196 In addition to its pension entitlement liabili-
ties to its benefi ciaries, a pension fund may sometimes
have a claim on the employer, as the pension manager
of the scheme. On the other hand, the pension man-
ager may have a claim on the surplus of the pension
fund. Such claims are excluded from pension entitle-
ments and are classifi ed as claims of pension funds on
pension manager (62064, 62164, 62264, 63064, 63164,
63264) (see paragraphs 7.199–7.200).
7.197 Pension entitlements are valued as follows:
- Th e liability of a defi ned-benefi t pension scheme
(including nonautonomous pension funds and
unfunded pension schemes) is the present value
of the promised benefi ts. - Th e liability of a defi ned-contribution pension
fund is the current market value of the fund’s net
assets, which is determined according to the per-
formance of the assets acquired with the pension
contributions.^59
7.198 Because the measurement of defi ned-benefi t
pension fund entitlements rests on various assump-
tions and methods, the nature of coverage and estima-
tion should be described in metadata accompanying
the balance sheet and other data reports.
(^58) Funded schemes for social insurance other than pensions are
not common.
(^59) Th e basis on which pension entitlement is calculated is de-
scribed in detail in the 2008 SNA, Chapter 17.