Any defined benefit pension plan sponsor reading this article might wonder why they care about proposals to create a monitoring group comprising, among others, the US SEC, the IMF and the World Bank to oversee the activities of the International Accounting Standards Committee Foundation, the IASB's Delaware-incorporated parent body.

Well, consider this: the monitoring group stands to gain a power to "review" the work of the trustees and to petition the IASB chairman directly, quite possibly on issues affecting pensions accounting.

According to the 21 July proposal of the International Accounting Standards Committee Foundation (IASFC) document, the group is "an autonomous body", separate from both the IASCF and the IASB. Its proponents hope it will enhance the IASCF's accountability by "establishing a formal link to public institutions".

The document continues: "The responsibilities of the Monitoring Group shall be: … to meet the trustees or a subgroup of the trustees at least once annually, and … have the authority to request meetings with the trustees or separately with the chairman of the trustees (with the chairman of the IASB as appropriate) about any area of work or either the trustees or the IASB."

The proposals merely codify existing practice. Potentially, they allow the monitoring group to raise questions about pensions accounting directly with the IASB chairman. The new monitoring group will also "participate in the process for appointing trustees", who in turn appoint IASB members.

It would seem that the proposals meet with the approval of the group's putative members, both in terms of its composition and its remit. In a joint 7 November 2007 press notice (SEC press notice 2007-226), they announced: "A natural step … would be to establish a means of accountability to those governmental authorities charged with protecting investors and regulating capital markets."

By the June 2008 IASB's Standards Advisory Council meeting in London, the executive chairman of Germany's national standard setter, the DRSC, was clear where it left him. "That is a real issue that will evolve with members of the German standard setter and, I presume, other countries that so far [voluntarily] provide funding to the IASB," argued Heinz-Joachim Neubürger. It was a case, he said, of "no taxation without representation". The message to the regulators was clear: if you want it, you pay for it.

As Neubürger's comments evidence, the constitutional review process has opened a Pandora's box of discontent over the involvement of regulatory agencies in standard setting, dissatisfaction with its funding arrangements, and substantial malcontent among constituents affected by controversial IASB projects, including pensions.

For example, seemingly blind to the likely adoption of IFRS reporting by the UK government, the IASCF's chairman, Gerrit Zalm, a former Dutch deputy prime minister, serves as an adviser to private-equity concern Permira. Zalm points out that Permira "has taken measures regarding its transparency that go beyond the guidelines of the Walker Report".

Amid this mêlée of conflicting interests and agendas, IPE asked the IASCF what safeguards its constitutional proposals contain for the UK government. "In terms of the UK national interest, that is an issue for the UK government and not the IASCF," replies Seidenstein. None, then.

Given the largely negative response to the IASB's flawed pensions project, IPE asked the IASCF precisely what that effort has cost. "We do not budget on a project-specific basis and do not make the salaries of our staff public," reveals Seidenstein. So, although the IASB is unable to account for the cost of a current project, its pensions accounting proposals require constituents to disaggregate benefit accumulation information on the basis of individual promises.

The reasoning behind the question, continues Seidenstein, is that it implies "a certain right of funding countries to influence our project." It is a reply that tends to oversimplify the issue. As a respected leading IFRS audit figure told us recently, IASB is in the business of marketing its accounting standards; its constituents decide whether those standards meet their commercial needs or not.

Meanwhile, as IASB's constituents struggle to secure a first-class solution to their pensions accounting conundrum, one group that is going first class all the way is the IASCF's trustees. IASCF confirms: "On flights of more than 12 hours and overnight, they are permitted to fly first class."

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