What other changes, apart from defined benefit plans, are proposed to GRAP 25 on Employee Benefits?
- September 22, 2020
- Posted by: Julianne Vissie
- Category: Blog
The Board issued an Exposure Draft on Review of GRAP 25 Employee Benefits (ED 184) which proposes changes to employee benefits, and specifically defined benefit plans. A previous article on Post-employment defined benefit plans – what is changing? discussed the changes related to defined benefit plans.
Defined benefit plans are either being phased out by entities or the schemes may not exist. These entities may still be impacted by changes proposed to other types of employee benefits in ED 184.
What other types of employee benefits are impacted by ED 184?
Short-term employee benefits are benefits due wholly before twelve months after the end of the reporting period in which service was rendered.
Post-employment defined contribution plans are plans where the employer pays fixed contributions into a separate fund and has no further obligations to pay contributions.
No changes are made to the requirements for short-term employee benefits or post-employment defined contribution plans. Guidance is added to clarify what these employee benefits comprise.
There was divergence in practice in the information presented and disclosed for other long-term employee benefits and termination benefits. To meet local needs, the Exposure Draft introduces guidance on the information to be disclosed for these employee benefits. Similar guidance is not included in IPSAS 39 on Employee Benefits.
| Type of employee benefit | Description | Proposed changes to the principles |
| Other long-term employee benefits | All employee benefits other than short-term, post-employment and termination benefits. | A disclosure objective, and guidance on achieving the objective, are introduced. |
| Termination benefits | Provided in exchange for termination of employment. | Guidance is provided on:
• distinguishing them from other employee benefits; • when they should be recognised; and • their measurement. A disclosure objective, and guidance on achieving the objective, are introduced. |
Access more information on changes other than to defined benefit plans here.
Where can the ED be accessed and how can you provide comment?
ED 184 has been published on the ASB’s website and can be accessed here. Comment can be submitted via the website or to the Secretariat of the ASB at info@asb.co.za by 30 November 2020.
The views expressed in this article are those of Secretariat and not the ASB Board.
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