FRS 102 – Case Study 2


The Group consists of five entities participating in both a Local Government Pension Scheme (LGPS) and a multi-employer non-segregated arrangement administered by the Pensions Trust (MENSA).

LGPS – produce full FRS 17 disclosures annually
MENSA – unable to determine share of assets and liabilities

The employers participating in the MENSA currently use the exemption under FRS 17 and account for their liabilities on a defined contribution basis by recording the contributions paid to the scheme in the P&L account.

What is changing?

Under FRS 102 this exemption is being removed and employers will have to disclose any liability that may exist.  There are two options:

  • Prepare a full accounting disclosure;
  • Record the present value of any future deficit contributions payable to the Scheme in the balance sheet, and allow for interest accruing on the deficit over the year in the P&L.

How did we help?

Consistency of accounting practice across the Group was important.  Given that one employer participated in the LGPS and therefore had to produce a full accounting disclosure, for consistency, the MENSA employers also required full accounting disclosures.

We developed a methodology for preparing full accounting disclosures for employers participating in the MENSA.  We worked with the Group auditor to agree a robust approach.

We provided the LGPS with a set of bespoke assumptions that better reflected the business plans of the organisation.  These assumptions were used in preparation of all FRS 102 disclosures.  These assumptions also resulted in a significant reduction in LGPS liabilities.

We provided the Group with individual FRS 102 reports for company accounts, and with a consolidated disclosure for the Group accounts.