Since 2008, Towers Watson has published a pioneering annual report on the finances of employee benefit plans of the largest companies in India. The inaugural study in 2008 revealed that 32% of Defined Benefit (DB) Liabilities were unfunded and in comparison this figure has markedly dropped to 14% as per the latest findings. Setting appropriate assumptions remains a critical issue as the absolute amount of actuarial gains and losses as a percentage of total benefits cost (median value) is approximately 39%. With changes to IFRS being made for employee benefits accounting there will be increased scrutiny on assumptions being used by companies because actuarial gain/losses will be separately identified as part of the ‘Other Comprehensive Income’ statement. Even though the accounting standard does not prescribe it, it would serve companies well to conduct a detailed liability reconciliation analyses over a multi-year period to understand the different drivers of cost (financial and demographic) causing the liability to change over time.