NAPF proposes tighter pension accounting standards for corporates

The UK's National Association of Pension Funds (NAPF) has proposed that future salary expectations be removed from pension scheme accounting standards. At the same time, it has advocated a move away from AA-rated corporate bonds to discount future liabilities. In a paper released entitled Accounting for Pensions, the NAPF argues that since companies do not normally have an obligation to increase future salaries, the benefit obligation should therefore no longer reflect estimated future growth in salaries.