Social Protection 291
rent (1415)). Th e investment income is also recorded
as being distributed to the benefi ciaries (classifi ed as
property expense for investment income disbursements
(2813)), who are deemed to reinvest the income in the
pension fund as contributions. Th erefore, the invest-
ment income payable on defi ned-contribution en-
titlements is equal to the investment income on the
fi nancial investments plus any net operating surplus
earned by renting land or buildings owned by the fund.
A2.57 Th e value of the pension entitlement liabil-
ity of a defi ned-contribution pension scheme is the
market value of the fi nancial assets held by the pen-
sion fund on behalf of the future benefi ciaries. Any
changes in the market value of these investments of
the pension fund would include holding gains and
losses. Th ese holding gains and losses should be re-
corded as changes in the value of the relevant assets of
the institutional unit administering the pension fund.
In addition, these holding gains or losses should also
be attributed to the policyholders. Th erefore, a match-
ing entry for the holding gain or losses in the liabil-
ity of the pension fund toward households should be
recorded.
A2.58 For a defi ned-contribution pension scheme,
the risks and costs associated with the scheme are
borne by the benefi ciaries. Th ere are no imputed con-
tributions for defi ned-contribution pension schemes,
unless the employer operates the scheme directly.
In that case, the value of the costs of operating the
scheme is treated as an imputed contribution payable
to the employee as part of compensation of employ-
ees. Th is amount is recorded by the employer as the
sale of a fi nancial service to the employees, classifi ed
as imputed sales of goods and services (1424) (see para-
graph 5.140). When the fund is operated by a unit
other than the employer, the operating costs are fi -
nanced from investment income retained by the fund
to meet its costs and generate a profi t. Th erefore, in
keeping with the recording of insurance, the invest-
ment income generated is treated as being attributed
in full to the benefi ciaries in the household sector who
use part of the income to purchase a fi nancial service
from the fund, and reinvest the remainder with the
fund.
A2.59 As indicated in paragraphs A2.3 and A2.21,
defi ned-contribution schemes are similar to life insur-
ance schemes.^16 However, a scheme that may be defi ned
in terms similar to a defi ned-contribution scheme, but
with a guaranteed minimum benefi t specifi ed, or other
hybrid schemes, should be treated as defi ned-benefi t
pension schemes in macroeconomic statistics.Government assumption of employment-
related pension obligations of other
institutional units
A2.60 On occasion, large one-off transactions
(lump-sum transactions) may occur between a gov-
ernment and another institutional unit, oft en a public
corporation, linked to pension reforms or to priva-
tization of the public corporations. Th e goal may be
to make the corporation competitive, or fi nancially
more attractive, by removing existing pension liabili-
ties from its balance sheet. Th is goal is achieved by
government assuming the liability in exchange for an
asset or assets from the other institutional unit. When
the value of the asset(s) receivable is the same as the
value of the liability assumed, the transaction is re-
corded as a transaction in fi nancial assets and liabili-
ties for both units involved.
A2.61 However, if the value of the asset(s) receiv-
able by government is less than the value of the liability
assumed, an expense in the form of a capital transfer
from government to the corporation is recorded for
the diff erence. Th e assumer (government) records an
increase in liabilities for pension entitlements, an in-
crease in the relevant fi nancial and/or nonfi nancial
assets, and an expense in the form of capital transfer
to the corporation (see paragraph 6.91). Th e corpora-
tion records a decrease in liabilities for pension en-
titlements, a decrease in fi nancial and/or nonfi nancial
assets, and revenue in the form of a capital transfer
from government.A2.62 If the value of the asset(s) receivable is more
than the value of the liability incurred, a capital trans-
fer receivable from the corporation to the government
is recorded for the diff erence (see paragraph 5.148).
Th e corporation records a decrease in liabilities for
pension entitlements, a decrease in fi nancial and/or
nonfi nancial assets, and an expense in the form of a
capital transfer to government.(^16) Th e treatment of the fl ows and stock positions of these schemes
is similar to the treatment of compulsory savings schemes.