The statistical recording of an unbalanced transfer of pension obligations to government under ESA 2010

Selected Transactions: Pension Data






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This note is about the statistical treatment of unbalanced transfers of pension obligations to government in the European Union. Institutional units, including private corporations, public corporations and government entities, may set up specific pension schemes for their own staff. For various reasons, government may take over these pension obligations incurred, in most cases, by a corporation under government control (thus, classified in the public sector as a public corporation) but also possibly by private corporations under some specific circumstances. Examples include plans for (total or partial) privatisations or new stock market quotations. Government, as the owner of the public corporations (or in the context of a support to a private corporation), may wish to improve the financial situation of the corporation by removing liabilities from their balance sheet. For instance, in the case of a planned privatisation, investors may be reluctant to purchase the equity of a corporation encumbered with pension obligations, most notably in the case of under-funding (where the assets of the scheme have a lower value than its future obligations and the employer has a commitment to bridge the gap).


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