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1993 SNA Update Information - Country comments for issue:
Retained earnings of mutual funds, insurance companies, and pension funds

Issue description
Issue description in [English] | [French] | [Russian] | [Spanish]
In the 1993 SNA, retained earnings of an entity are generally treated as the income and saving of the entity, rather than the owner. However, exceptions are made for life insurance companies, pension funds and foreign direct investment companies, where there is an imputed outflow to the policyholders, beneficiaries, or owners (respectively), with an equal financial account inflow from them. TheESA 95 introduces a similar treatment for mutual funds by imputing a distribution of retained earnings to the investors and a subsequent reinvestment in the fund. Should the SNA follow this treatment to have a more consistent treatment of various forms of collective investment schemes?
Country comments
Number of country comments for selected issue:45
  Date postedSourceComment
 27/11/2006AustraliaWe agree with the AEG recommendations concerning insurance companies and pension funds. Whilst we believe that a reinvested earnings approach should be adopted for all equity positions, and not just direct foreign investment equity positions, it is not clear to us why mutual funds are singled out for this treatment. This could be seen as an inconsistency with other equity positions which do not involve direct foreign investment.
We suggest that the definition of investment funds be principles-based rather than legalistic/ prescriptive as the nature of such funds varies significantly between countries.
 11/10/2006ArmeniaThe National Statistical Service of the Republic of Armenia agrees with the most recent AEG recommendations.
 10/10/2006SwedenAgreement with proposal
 29/09/2006Bank of KoreaWe broadly support the recommendations.
 15/09/2006United KingdomWe support the recommendations made by the AEG. As noted, however, it is important to resolve the issue about the inclusion of holding gains and losses mentioned in the conclusions.
 15/09/2006LatviaAfter deep discussions and expert consultations we basically support the 1993 SNA Update Issues.
 15/09/2006NorwayWe agree with AEG's recommendation provided that the definition of retained earnings in mutual funds will be operational in practice, and do not imply that the income must be calculated for each fund separately. We find it natural to consider whether it is convenient or practical to use the same definition of retained earnings as the definition of reinvested earnings for direct investment enterprises in BPM, i.e. to include holding gains and losses recorded in the profit and loss account.
Provided that the definition of retained earnings in mutual funds will be operational, we also support the new component "property income attributed to holders of investment funds". We prefer not to have the new component optionally sub-divided into interests, dividends and other income.
 21/08/2006Central Bank of El SalvadorSe está de acuerdo en seguir estudiando el tema tal como lo hace el SEC95 y se solicita se hagan aclaraciones específicas en los casos de los fondos de inversión diferentes a los fondos de pensiones, seguros de vida y de inversión extranjera directa.

The SCN agrees that the matter should remain under study as is the case with ESA 95, and asks that specific clarifications be made with regard to investment funds other than pension funds, life insurance funds, and direct foreign investment funds.
 18/08/2006NetherlandsWe generally support the recommendations made at the Frankfurt Meeting of the AEG.
 18/08/2006USAWe agree with the recommendations of the AEG.
 02/08/2006European Central BankThe ECB generally supports the recommendations made by the AEG.
 01/08/2006Hong Kong, ChinaWe agree to the AEG’s recommendation that holding gains or losses should be excluded from the property income attributed to holders of assets in investment funds. Other recommendations proposed by the AEG are also acceptable.
 01/08/2006National Bank/ National Bureau for Statistics MoldovaNational Bank and National Bureau for Statistics of Moldova agree with the recommendations made at the latest meeting of the AEG.
 01/08/2006Reserve Bank of South AfricaWe carefully worked through all the issues and would like to give our general support to the recommendations made by the AEG.
 31/07/2006Macao SARStatistics and Census Service of Macao SAR agrees to the AEG recommendations and has no further comments.
 31/07/2006Bosnia and HerzegovinaWe agree with AEG recommendations on the update of the 1993 SNA and do not have any further comments.
 28/07/2006National Bank of SlovakiaConcerning the results of the most recent AEG meeting, we fully support the conclusions and recommendations made by the AEG.
 28/07/2006LithuaniaIn general we support the recommendations.
 28/07/2006Bank of PortugalBanco de Portugal would like to express general support for the recommendations made in the Frankfurt meeting of the Advisory Expert Group on National Accounts (AEG).
 28/07/2006Bank of PolandPlease find our general support for the AEG recommendations made during its recent meeting in Frankfurt.
 27/07/2006PolandThe split of property income attributed to holders of investment funds into “dividends distributed to investment fund shareholders” and “retained earnings attributed to investment fund shareholders” seems to be too detailed taking into account existing reporting. Getting necessary data would be possible basing on some estimates only.
 27/07/2006Bank of Sierra LeoneWe agree with the recommendations made by the AEG.
 25/07/2006Bank of ItalyWe broadly support the conclusions.
 24/07/2006GermanyWe are not in favor of an exclusion of. holding gains or losses from the property income attributed to holders of assets in investment funds. This would be a specific treatment of special institutions or is it intended to adjust all dividend payments of enterprises from holding gains or losses?
 24/07/2006National Bank of the Republic of AzerbaijanWe have analyzed the “Comment on the recommendations of the most recent Advisory Expert Group on National Accounts (AEG) meeting (January 30 – February 8, 2006) in Frankfurt” within the scope of our responsibilities and I am pleased to inform you that we are in agreement with the AEG recommendations.
 10/07/2006DenmarkAgreement
 23/02/2006South African Reserve Bank We support the recommendations of the AEG.
 27/01/2006Central Bank of El Salvadorde acuerdo con la posición del grupo consultivo, en aceptar el principio de registrar las utilidades retenidas de los fondos de inversión en forma similar al ingreso atribuido a los titulares de las pólizas.
 22/12/2005Serbia and MontenegroWe agree with the suggested changes.
 14/12/2005FranceLe SEC95 avait introduit une divergence par rapport au SCN93 en imputant aux investisseurs, actionnaires des OPCVM (« mutual funds »), les revenus non distribues et réinvestis de ces organismes. L'AEG accepte de suivre le SEC95. L'INSEE soutient le principe proposé sur le traitement des organismes de placement collectif et attend néanmoins la version définitive du texte pour se prononcer.
 13/12/2005CanadaCanada agrees with this recommendation – to accrue income from collective schemes to the investors and that more work needs to be done to establish a generally applicable definition of collective schemes. Canada currently follows this treatment for mutual funds and pension schemes. This is not viewed as being similar to the imputed transactions on FDI because the collective schemes have no legal status as having any decision or control over the distribution of the income accruing to the fund. In the case of FDIs, income can be retained by the legal entity which increases wealth for the owner without necessity of imputing flows.
 12/12/2005Bank of KoreaWe agree with the recommendations made by the AEG. Although, if we treat retained earnings of various collective investment schemes as the technical reserves of life insurance companies, this treatment can give us more accurate information on household savings and etc., more discussion on terminologies and characteristics of the schemes should be added.
 09/12/2005European Central BankThe proposed treatment is now almost in line with the treatment in the 1995 ESA
 09/12/2005RussiaRosstat largely supports the recommendations on the updating 1993 SNA, made at the July 2005 meeting of the Advisory Expert Group on National Accounts.
 06/12/2005Central Bank of NorwayThe Central Bank of Norway supports the principle of recording retained earnings of mutual funds and other collective investment funds in a similar way to income attributed to insurance policy holders. Furthermore, we support a separate income category for retained earnings but with no breakdown by source of income.
 05/12/2005DenmarkAgreement
 02/12/2005NetherlandsWe generally support the recommendations of the AEG.
 02/12/2005AustraliaAustralia's position on reinvested earnings is that the earnings of an enterprise accrue to its investors as they are earned. Based on this rationale, the reinvested earnings for all enterprises should be recorded. We therefore support any extension of the recording of reinvested earnings.
Australia also supports further work on the broader concept of income beyond the life of the update of SNA/BPM.
 02/12/2005TurkeyWe agree with the recommendations made at the July 2005 meeting of the Advisory Expert Group on National Accounts.
 01/12/2005NorwayWe agree with AEG's recommendation a), provided that the definition of retained earnings in mutual funds will be operational in practice, and do not imply that the income must be calculated for each fund separately. We find it natural to consider whether it is convenient/practical to use the same definition of retained earnings as the definition of reinvested earnings for direct investment enterprises in BPM, i.e. to include holding gains and losses recorded in the profit and loss account.
Provided that the definition of retained earnings in mutual funds will be operational, we also support the new component "property income attributed to holders of investment funds" b). We prefer not to have the new component optionally sub-divided into interests, dividends and other income.
We will return to question c) and d) as AEG's final recommendations are presented.
 01/12/2005United KingdomWe agree with recommendation a). We will need to comment again later when the outstanding work is complete.
 30/11/2005Slovak RepublicSO SR give support to AEG recommendation related to ongoing effort for clarification of issue.
 30/11/2005ItalyIstat fully agrees with the recommendations made at the July 2005 meeting of the Advisory Expert Group on National Accounts.
 30/11/2005State Bank of PakistanWe have gone through recommendations made by Advisory Expert Group (AEG) and fully agree with them.
 29/11/2005People's Bank of ChinaI agree with your improvements and have no other suggestions.
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