The Changing Political Economy of Pension Fund Accounting Regulation: A Comparative Study of Four Anglo-American Countries

Abstract

This paper examines the inter-relationships between changes the political economy of pensions law and changes in pension accounting regulation in four Anglo-American countries. A four fold property rights framework is developed which identifies the common inequities in the ownership of pension deficits and surpluses. Deficiencies are identified relating to various issues concerning the recognition, measurement and disclosure of pension fund surpluses or deficits. These aspects in include inequality in pension provision, the capture of pension regulation through delegation to narrow professional bodies, the corporatisation of pension accounting language and discourse, and the general opaqueness and dimunition of public pension regulations. Until the 1970s, pensions were generally seen as being a paternalistic social security and pension funds were relatively unregulated. However the social, economic-consequences of ageing populations on the financing of public pensions has brought about a new emphasis on professionally-developed accounting standards as a primary means of regulating the accountability of pension funds. This paper analyses how the changing political economy of pensions differentially affected: (i) the measurement of pension liabilities; (ii) the development of pension fund accounting standards; and (iii) how liabilities to pension fund members are measured and recognised.