Defined contribution plans
BC28 IAS 19 before its revision in 1998 defined:
(a) defined contribution plans as retirement benefit plans under which amounts to be paid as retirement benefits are determined by reference to contributions to a fund together with investment earnings thereon; and
(b) defined benefit plans as retirement benefit plans under which amounts to be paid as retirement benefits are determined by reference to a formula usually based on employees' remuneration and/or years of service.
BC29 IASC considered these definitions unsatisfactory because they focused on the benefit receivable by the employee, rather than on the cost to the entity. The definitions introduced in 1998 focused on the downside risk that the cost to the entity may increase. The definition of defined contribution plans does not exclude the upside potential that the cost to the entity may be less than expected.
Defined benefit plans: amendments issued in 2011
BC30 The amendments made in 2011 clarify tha
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