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Final stage

In 2016 the IASB added a project to its research pipeline on pension benefits that depend on asset returns, and between 2018 and 2021 the IASB researched the feasibility of amending IAS 19 Employee Benefits in relation to those pension benefits. Such benefits depend on the performance of specified assets, such as shares or bonds (reference assets).

The IASB researched an approach that would cap the estimated cost of providing this type of pension benefit by applying the discount rate required by IAS 19 (as opposed to the expected rate of return on the reference assets) when that discount rate is lower than the expected rate of return on the reference assets (capped approach).

The IASB decided not to develop amendments to IAS 19 because its research did not find enough evidence of pension benefits that depend on asset returns being widely offered across jurisdictions. Therefore, the IASB concluded that the cost of implementing changes outweighed the potential benefit of improved financial reporting. Furthermore, the IASB was mindful of introducing an approach that would require an exception to the measurement requirements in IAS 19.

The Project Summary was published in April 2022 providing an overview of research discussed by the IASB.