CERTYNEX IFRS ACADEMY

Each year, Sirius SA pays an insurer a contribution equal to 5 % of salaries; the insurer then pays the retirement pensions. The contract provides that Sirius pays additional contributions if the accumulated assets are insufficient to pay the promised pensions (case facts). How is this plan classified under IAS 19?

As a defined contribution plan, since the benefits are paid by a separate entity, the insurer.

As a defined benefit plan: in substance, the risk of insufficient assets falls on Sirius, whose obligation goes beyond the agreed contributions.

As a defined contribution plan, since the annual contribution is set at 5 % of salaries.

Outside the scope of IAS 19, since a pension paid by an insurer is not an employee benefit of Sirius.