16.5 Other Post-Employment Benefits

In addition to pension plans, employers will often provide other types of post-employment benefits to their employees. While there are many other benefits that employers may offer to encourage long service by employees, the most common is additional health care coverage. As IAS 19 requires other post-employment benefits to be accounted for in essentially the same manner as pension plans, this can create some measurement challenges because the use of these benefits is less predictable than a regular monthly pension payment. Health care costs will be incurred when the retired employee becomes ill, and the required amounts to be paid are widely variable. However, despite these measurement challenges, the amounts must still be estimated and accounted for in order to provide a true and fair representation of the company’s financial position.