Imputed social contributions (D.612)
4.98
Imputed social contributions (D.612) represent the counterpart to social
benefits (less eventual employees' social contributions) paid directly by employers (i.e. not linked to employers' actual contributions) to their employees or former employees and other
eligible persons. They correspond to flow D.122. Their value should, in principle, be
based on actuarial considerations.
4.99
It is necessary to introduce imputed social contributions if the social
benefits distributed directly by employers are to be included in the accounts under
the heading social benefits and if the cost of these benefits (for the part
which is not covered by employees' actual contributions) is to be included in the compensation of employees paid
by the employer.
When employers provide social benefits themselves directly to their employees,
ex-employees or dependants out of their own resources without involving a
social security fund, an insurance enterprise or an autonomous pension fund, and
without creating a special fund or segregate reserve for the purpose,
beneficiaries may be considered as being protected against various specific needs, or
circumstances, even though no payments are being made to cover them.
Remuneration should therefore be imputed for employees equal in value to the
amount of social contributions that would be needed to secure the de facto
entitlements to the social benefits they accumulate. These amounts depend not only
on the levels of the benefits currently payable but also on the ways in which
employers' liabilities under such schemes are likely to evolve in the future as a result
of factors such as expected changes in the numbers, age distribution and life
expectancies of their present and previous employees. Thus, the values that
should be imputed for the contribution ought, in principle, to be based on the
same kind of actuarial considerations that determine the levels of premiums
charged by insurance enterprises. When as a result of political events or economic
changes, the ratio between the number currently employed and the number receiving
pensions changes appreciably and becomes abnormal, the value of the imputed
contributions for current employees should be estimated, which will be different
from the actual value of the pensions paid out. A reasonable percentage of
wages and salaries paid to current employees can be used for this purpose.
In practice, however, it may be difficult to decide how large such imputed
contributions should be. The enterprise may make estimates itself, perhaps on the
basis of the contributions paid into similar funded schemes, in order to
calculate its likely liabilities in the future. Otherwise, the only practical
alternative may be to use the unfunded social benefits payable by the enterprise
during the same accounting period (after deducting actual contributions made by
employees themselves) as an estimate of the imputed remuneration that would be
needed to cover the imputed contributions. While there are obviously many reasons
why the value of the imputed contributions that would be needed may diverge from
the unfunded social benefits actually paid in the same period, such as the
changing composition and age structure of the enterprise's labour force, the benefits actually paid in the current period (less
employees' social contributions) may nevertheless provide sufficient estimates of the
contributions and associated imputed remuneration.
4.100
Employers are recorded, in the generation of income account, as paying to
their existing employees as a component of their compensation an amount described
as imputed social contributions equal in value to the estimated social
contributions that would be needed to provide for the unfunded social benefits to which
they become entitled. Employees are recorded, in the secondary distribution of
income account, as paying back to their employers the same amount of imputed
social contributions (i.e. current transfers) as if they were paying them to a
separate social insurance scheme.
4.101
Time of recording: Imputed social contributions which represent the
counterpart of compulsory direct social benefits are recorded at the time the obligation
to pay the benefits arises.
Imputed social contributions which represent the counterpart of voluntary
direct social benefits are recorded at the time the benefits are provided.
4.102
In the system of accounts, imputed social contributions are recorded: