PricewaterhouseCoopers (PwC) is urging companies to provide more detailed information about their pension schemes so as not to confuse stakeholders.
A multi-stakeholder group, Report Leadership, stressed that better presentation of pension details in annual accounts and reports would lead to better communication with investors.
The group has produced a guide that covers various areas of corporate reporting and makes recommendations that will highlight the importance of pension liabilities. The ideas are illustrated through a fictitious company named Generico and its annual report, which includes explanations of mortality tables and an analysis of actuarial assumptions.
PricewaterhouseCooper's Marc Hommel noted that the audience for pensions reporting is steadily increasing and that finance directors are facing "increasingly robust questioning from investors and rating agencies".
"Organisations should provide disclosures that are informative, understandable and relevant," he said. "Currently, much corporate reporting of pension liabilities suffers from being too complex or incomplete.
"Investors need to be able to understand the basis of each measure disclosed, the assumptions chosen for calculations, and the sensitivities of the results to change."
A separate study from Towers Perrin suggests that defined pensions schemes are destined to die out by 2012, to be replaced by defined contribution plans.
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