For employers pension issues can be perceived as increasingly complex and difficult to understand. KPMG has extensive experience in supporting companies and organizations in various pension issues. Through our experts in the field of pensions, we can offer customized solutions for handling the issues associated with pensions.
We provide advice on following issues
Pension Health Check provides companies with control over their pension commitments
Whether you are a publicly listed group, privately owned company, municipality, region or economic association, we can help map your pension commitments while addressing legal, accounting, valuation, and tax-related risks. With the support of our comprehensive analysis, we can identify potential deficiencies, propose corrective measures, and help you avoid unnecessary costs in the future.
Pension promises extend far into the future, and hidden errors in areas such as personnel administrative processes can have significant financial consequences. For example, underreporting salaries by just 1,000 SEK for a dozen employees can result in a hidden liability of 2 million SEK.
Our Pension team includes pension specialists, actuaries, accounting experts, and tax consultants, all working together to provide a thorough and accurate review of your pension commitments.
Don’t hesitate to contact us – we’re here to help!
Our accounting experts can help you with pension accounting and provide active support on application issues.
Many companies find pension accounting to be complex and challenging. The disclosure requirements in international accounting standards such as IFRS and USGAAP have significantly increased the demands. Complex issues can also arise under Swedish accounting practices, such as direct pensions, recognition of pension obligations in the balance sheet, payroll taxes and more.
Approximately 90% of employees in Sweden are covered by some form of occupational pension, either through collective bargaining agreements or individual arrangements. Pensions can be defined as a promise of deferred salary, tied to the legal entity that has issued the promise. For this reason, it is crucial for both buyers and sellers to fully understand the obligations and potential risks being transferred in any transaction.
Increased life expectancy requires higher pension provisions
The Swedish population is aging. According to Statistics Sweden (SCB), one in three deaths now occurs after the individual has reached the age of 90, compared to just 10% fifty years ago and this demographic challenge is expected to continue.
As life expectancy increases, pension agreements that include guarantees of lifelong payments require greater provisions. Therefore, it is essential to thoroughly analyse and assess pension-related risks when evaluating acquisitions or divestments.
Pension Due Diligence maps the current pension landscape
Based on our experience, there are several key focus areas for conducting a robust pension review. While the service is tailored to meet specific needs, the following issues typically require attention to ensure clarity and security regarding pensions:
- Is the pension liability appropriately valued with reasonable assumptions?
- How will the company’s future cash flow be impacted?
- Have the correct premiums been paid by the company?
- How are pension costs likely to develop in the future?
- Are all pension plans accurately described and reported?
- What pension benefits are provided to management?
Would you like to know more?
We have extensive experience in Pension Due Diligence, supporting more than 500 transactions, both nationally and internationally. Contact us to learn more about how we can assist you!
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