BAV-Praxisforum Autumn 2023

On Monday, 25 September 2023, the ks actuaries team attended the BAV-Praxisforum Autumn 2023 in Schladming. We had the opportunity to share our expertise on the “Valuation of Employee Benefit Obligations”. Many thanks to Vermittlerakademie and Zurich Versicherung AG for the invitation!

Focus on employee benefit provisions

A key topic of our presentation was the recognition and measurement of employee benefit provisions. Particularly in times of rising interest rates and high inflation, companies face significant challenges:

• Interest rate risk: Even small fluctuations in the discount rate can have a significant impact on the level of provisions.
• Demographic trends: Longer life expectancies and ageing workforces increase obligations arising from pension and severance pay commitments.
• Accounting standards: Differences between the Austrian Commercial Code (UGB), tax law and international standards (IFRS) often give rise to complex valuation issues in practice.

Practical implications for companies

Employee benefit provisions are more than just a balance sheet item – they directly affect a company’s financial and liquidity planning. Incorrect valuations or outdated assumptions can:

• put pressure on the equity ratio,
• lead to unexpected fluctuations in the profit and loss account,
• and, in extreme cases, even prevent investment decisions from being made.

This makes actuarial expertise essential: only through robust models, realistic assumptions and regular reviews can companies plan with confidence.

Trends and outlook

The discussions at the BAV-Praxisforum clearly highlighted the following:

• The sustainability of pension systems remains an ongoing concern – both for state pensions (ASVG/APG) and occupational pension provision.
• More and more companies are seeking digitally supported solutions to calculate their provisions more efficiently and improve their scenario analysis.
• At the same time, there is growing awareness that employee benefit provisions are not merely “burdensome obligations”, but part of strategic business management.

Our conclusion

We are delighted to have contributed our expertise at the BAV-Praxisforum. The discussion once again demonstrated the importance of transparency and professionalism in the valuation of employee benefit provisions. Only then can companies manage their risks while providing long-term security for their employees.