IPSAS 49
Active
Retirement Benefit Plans
Prescribes financial reporting requirements for public sector retirement benefit plans as separate reporting entities, covering fair value measurement of plan investments, defined benefit obligations using projected salary levels, and mandatory direct-method cash flow statements. Effective 1 January 2026.
Active Standard
IPSAS 49 Retirement Benefit Plans is the current, active standard issued by the IPSASB prescribing financial reporting requirements for retirement benefit plans as separate reporting entities in the public sector. Effective for periods beginning on or after 1 January 2026.
IPSAS 49 is drawn from IAS 26 Accounting and Reporting by Retirement Benefit Plans, but introduces important public sector improvements: mandating the use of projected salary levels for defined benefit obligations (removing IAS 26's current-salary alternative) and requiring a mandatory direct-method cash flow statement under IPSAS 2.
1
Objective, Scope & Plan Types (paras. 1–8)
Objective – accounting BY the plan, not the employer
Prescribes accounting and reporting requirements for PUBLIC SECTOR RETIREMENT BENEFIT PLANS themselves – a genuinely distinct perspective from IPSAS 39 (which governs the EMPLOYER's own accounting for its obligations). The plan is treated as a REPORTING ENTITY SEPARATE from the employers of its participants (para. 3).
Covers the plan for ALL participants AS A GROUP – not individual participant benefit reports (para. 4). Excludes termination payments, deferred compensation, long-service leave, early-retirement/redundancy plans, health/welfare plans, bonus plans, and government social security arrangements (para. 5).
Plan types, and the insurance-company carve-out
DEFINED BENEFIT plans EXPLICITLY include HYBRID plans (mixing both types) – all references to "defined benefit" in this Standard cover hybrids too (para. 6) Applies REGARDLESS of whether a separate fund exists, and regardless of trustees (para. 7) Insurance-invested plans → IN scope, UNLESS the contract is in a SPECIFIC participant's/group's name AND the obligation is SOLELY the insurance company's responsibility (para. 8)
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Definitions (para. 9)
The obligation-side vocabulary
Actuarial present value of promised retirement benefits
The present value of expected plan payments to participants, attributable to service ALREADY rendered.
Retirement benefit obligations
For defined benefit plans – the actuarial present value of promised benefits. For defined contribution plans – the defined contribution obligations.
Vested benefits
Benefits whose rights are NOT conditional on continued employment.
The net-position vocabulary
Net assets available for benefits
Defined benefit plans: plan assets LESS liabilities OTHER THAN the actuarial present value (and, for hybrids, the defined contribution obligation). Defined contribution plans: plan assets LESS liabilities other than the defined contribution obligations.
Funding
The transfer of assets to the retirement benefit plan (separate from the employer/sponsor) to meet future benefit payment obligations.
3
Recognition (paras. 10–11)
Two plan types, two SOFP recognition treatments
Plan typeRecognition on the SOFP
Defined benefitA PROVISION for the actuarial present value of promised retirement benefits
Defined contributionThe DEFINED CONTRIBUTION OBLIGATIONS owed to participants
Since the plan is the reporting entity (not the employer), these obligations sit on the PLAN's own statement of financial position – a direct counterpart to the employer-side net defined benefit liability recognized under IPSAS 39.
4
Measurement – Plan Investments & Actuarial Present Value (paras. 12–14)
Plan investments – always fair value
Retirement benefit plan investments SHALL be measured at FAIR VALUE
No accounting policy choice here – unlike IPSAS 39's dual net-interest/remeasurement mechanics for the employer, the plan itself simply fair-values its investment portfolio.
The projected salary requirement – a genuine IAS 26 divergence
Actuarial present value = benefits promised under the plan's terms, for service rendered to date, using PROJECTED salary levels
IPSAS 49 MANDATES projected salaries – IAS 26 allows a CHOICE between current and projected salary levels (§11). If no current actuarial valuation exists, the most RECENT one is used, updated for material transactions/circumstance changes (para. 14).
5
Presentation – the Statement of Financial Position (paras. 15, 17)
The full required statement set (para. 15)
A STATEMENT OF FINANCIAL POSITION A STATEMENT OF CHANGES IN NET ASSETS available for benefits A CASH FLOW STATEMENT NOTES to the financial statements
Statement of Financial Position – line items (para. 17)
Plan investments (suitably classified) Contributions receivable Other assets Benefits due and payable Other liabilities (excluding retirement benefit obligations to participants) NET ASSETS AVAILABLE FOR BENEFITS Provision for the actuarial present value of promised retirement benefits (defined benefit) OR defined contribution obligation (defined contribution) EXCESS OR DEFICIT – the plan's own funded-status bottom line
6
Presentation – Changes in Net Assets & the Cash Flow Statement (paras. 18–19)
Statement of Changes in Net Assets Available for Benefits – line items (para. 18)
Employer/sponsor contributions Participant contributions Investment income Other income Benefits paid or payable (analyzed, e.g. retirement/death/disability, or lump sums) Transfers from and to OTHER plans Administrative expenses Other expenses Taxes on income
Opening and closing balances are always presented.
Cash Flow Statement – a mandatory method choice
MUST use the DIRECT method, per IPSAS 2 (para. 19)
A genuinely distinctive requirement – IPSAS 2 generally permits EITHER the direct or indirect method for operating activities, but IPSAS 49 removes that choice entirely for retirement benefit plans, mandating direct-method presentation. This is ALSO a divergence from IAS 26, which doesn't require a cash flow statement at all (§11).
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Changes in Retirement Benefit Obligations (paras. 16, 20–21)
Statement OR note – a genuine either/or choice
Explain changes in retirement benefit obligations EITHER via a dedicated STATEMENT of changes, OR a NOTE reconciliation between opening and closing balances
Amendments to the plan (e.g. changes in participant benefits) Changes in the plan's NATURE (e.g. a merger with another plan) Participant benefits allocated to DEFINED CONTRIBUTION accounts Net changes to DEFINED BENEFIT accrued benefits (e.g. actuarial movements) Employer/sponsor and participant contributions; taxes on contributions Benefits paid; administration expenses
Opening and closing balances are always presented, regardless of which format is chosen (paras. 20–21).
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Disclosure Requirements – General, Both Plan Types (para. 22)
Core notes package
A summary of significant ACCOUNTING POLICIES A DESCRIPTION of the plan (§9), and the effect of any period changes The BASIS for valuing all plan assets, including fair value hierarchy disclosure per class Details of any SINGLE investment exceeding 5% of net assets available for benefits, or 5% of any security class/type
Related-party and funding disclosures
Details of any INVESTMENT IN THE EMPLOYER/SPONSOR – a genuine conflict-of-interest transparency item Liabilities OTHER than the retirement benefit obligation itself A description of the FUNDING POLICY, including any employer/sponsor obligation to meet an actuarially-determined SHORTFALL in a funded plan
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Disclosure – Defined Benefit Specific & Plan Description (paras. 23–24)
Defined benefit plans – additional required items (para. 23)
The actuarial present value, DISTINGUISHING vested vs. non-vested benefits Significant ACTUARIAL ASSUMPTIONS, and the calculation METHOD used The EFFECT of any assumption changes that significantly affected the actuarial present value The DATE of the actuarial valuation, and when the NEXT one is due
Plan description – mandatory for ALL plans (para. 24)
Name(s) of the employer(s)/sponsor(s) and participant groups covered Number of participants receiving benefits, and other participants (classified as appropriate) Plan TYPE – defined contribution or defined benefit Whether participants CONTRIBUTE to the plan A description of the retirement benefits PROMISED Any plan TERMINATION terms Changes to ANY of the above during the period
10
Effective Date & Transition (paras. 25–27)
One of the newest Standards in the Handbook
Periods beginning on/after 1 January 2026. Earlier application permitted, with disclosure of that fact (para. 25). Applied PROSPECTIVELY from the beginning of the annual period first applied (para. 27) – no retrospective option, unlike IPSAS 48's dual-path transition.
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Relationship to IAS/IFRS & GFS – Comparison with IAS 26
Comparison – IPSAS 49 vs IAS 26
IPSAS 49 is drawn from IAS 26 (amendments to Feb 2021), Accounting and Reporting by Retirement Benefit Plans.
Different DEFINITIONS – e.g. defined benefit plans, net assets available for benefits IPSAS 49 MANDATES projected salary levels only; IAS 26 permits a CHOICE of current or projected (§4) IPSAS 49 REQUIRES a cash flow statement; IAS 26 does NOT (§6)
Comparison – IPSAS 49 vs GFS
Both PERMIT contributions to be accounted for as EITHER revenue or a participant liability, depending on plan terms/scheme type Both REQUIRE retirement benefit obligations recognized on the balance sheet/SOFP – GFS calls this "pension entitlements"
A notably CLOSE alignment with GFS compared to many other Standards in this library – reflecting how naturally pension-scheme reporting maps onto statistical frameworks.
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Statement / Process Mapping
Decision map
- Is this a retirement benefit PLAN itself (the reporting entity), not the employer's own accounting? → IPSAS 49 applies; the employer's mirror-image obligation is governed by IPSAS 39 instead (§1)
- DEFINED BENEFIT (including hybrid) or DEFINED CONTRIBUTION? → determines which liability line appears on the SOFP (§3)
- Measure plan INVESTMENTS at fair value; measure the DEFINED BENEFIT obligation using projected salary levels (§4)
- Prepare the FULL statement set – SOFP, changes in net assets, direct-method cash flow statement, notes (§5, §6)
- Explain OBLIGATION changes – dedicated statement, or note reconciliation (§7)
- Disclose plan description, funding policy, and (for defined benefit) actuarial assumptions/methods (§8, §9)
Concept-to-statement mapping table
IPSAS 49 conceptStatement(s)Notes
Plan investmentsSOFPAlways at fair value
Actuarial present value provision (defined benefit)SOFPProjected salary levels, mandatory
Net assets available for benefitsSOFPKey summary line item
Contributions, investment income, benefits paidChanges in Net AssetsOpening/closing balances required
All cash flowsCash FlowDirect method mandatory (IPSAS 2)
Actuarial assumptions, plan description, funding policyNotesMandatory disclosures, paras. 22–24
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Related Standards – Cross-Reference Map
How IPSAS 49 connects across the IPSAS body of literature
StandardNature of the connection
IPSAS 2Mandatory direct-method cash flow statement basis (§6)
IPSAS 33Governs when this Standard applies for entities adopting accrual IPSAS after the base effective date (§10)
IPSAS 39Governs the EMPLOYER's own mirror-image accounting for the same retirement benefit obligations – explicitly excluded from this Standard's own scope, and vice versa (§1)
IPSAS 41 / 46Fair value measurement methodology for plan investments (§4)
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Quick-Reference Glossary
Retirement benefit plan
An arrangement whereby an employer/sponsor provides benefits to participants on or after termination of employment.
Actuarial present value of promised retirement benefits
The present value of expected plan payments attributable to service already rendered.
Net assets available for benefits
Plan assets less liabilities other than the retirement benefit obligation itself.
Vested benefits
Benefits whose rights are not conditional on continued employment.
Funding
The transfer of assets to the retirement benefit plan, separate from the employer/sponsor, to meet future benefit obligations.
Participants
The members of a retirement benefit plan and others entitled to benefits under it.
Financial statement key
SOFP Statement of financial position
SOFPerf Statement of financial performance
Notes Notes to the financial statements