CASE-STUDY – Individual Assignment

Myte-bee Ltd, a public limited company, is a leading support services company which focuses on the building industry. The company would like advice on how to treat certain items under IAS 19 Employee benefits. The company operates the Myte-bee Ltd Pension Plan B which commenced on 1 November 20X6 and the Myte-bee Ltd Pension Plan A, which was closed to new entrants from 31 October 20X6, but which was open to future service accrual for the employees already in the scheme. The assets of the schemes are held separately from those of the company in funds under the control of trustees. The following information relates to the two schemes.

Myte-bee Ltd Pension Plan A

The terms of the plan are as follows.

Employees contribute 6% of their salaries to the plan.

Myte-bee Ltd contributes, currently, the same amount to the plan for the benefit of the employees.

On retirement, employees are guaranteed a pension which is based upon the number of year’s service with the company and their final salary.

Myte-bee Ltd Pension Plan B

Under the terms of the plan, Myte-bee Ltd does not guarantee any return on the contributions paid into the fund. The company’s legal and constructive obligation is limited to the amount that is contributed to the fund.

Discusses the nature of and differences between a defined contribution plan and a defined benefit with specific reference to the company’s two schemes. (20 marks)

The overall actuarial assumptions used must be unbiased and mutually compatible, and represent the best estimate of the variables determining the ultimate post-employment benefit cost. Discuss five (5) Actuarial assumptions used in measurement of a defined benefit liability or asset. (10 marks)

Do an analysis on any recent pension reforms which has been implemented and currently being undertaken for the public sector, private sector, hotel industry and self-employed individuals. (10 marks)


Myte-bee Ltd is a renowned building industry support services firm. Regarding IAS 19 Employee perks, the corporation seeks assistance. Both the Myte-bee Ltd Pension Plan B and the Myte-bee Ltd Pension Plan A were closed to new entrants as of 31 October 2016 but were open to future service accrual for those already in the program. The plans’ assets are held independently from the company’s in trust funds. The following pertains to both systems.

Myte-bee Pension A

The plan’s terms are as follows.

Employees contribute 6% of their salary.

Myte-bee Ltd. continues to contribute the same amount to the plan.

Employees are guaranteed a pension depending on their years of service and final wage.

Myte-bee Pension B

The plan’s conditions state that Myte-bee Ltd cannot guarantee a return on contributions. L’obligation légale et constructive de la société est limitée au montant versé au fond

Compares and contrasts the company’s two defined contribution and defined benefit plans. ( 20 )

To calculate the final post-employment benefit cost, the actuarial assumptions must be unbiased and mutually consistent. Compare and contrast the following five (5) actuarial assumptions. (10)

Analyze recent pension reforms for the public, private, hospitality industry, and self-employed. (10)