FASB Closing In On Pension Reporting Rules

July 22, 2003 (PLANSPONSOR.com) - Accounting regulators are getting closer to instituting stricter defined benefit pension reporting that will likely include more quarterly reporting on corporate pension contributions and more details about a plan's assets.

According to a Dow Jones news report, the Financial Accounting Standards Board (FASB) indicates it will be ready to take public comment on the pension disclosure regulations by the end of the third quarter. Companies are currently only required to issue pension data reports once a year (See FASB Tightens Pension Reporting Noose ).

The Norwalk, Connecticut-based accounting rulemaker has said it intends to require more details on the kind of assets held in a plan, how much a sponsor expects to earn on assets, where pension expense is generated within a company, and how future obligations are valued.

Whatever FASB ends up doing, it could happen quickly, according to a Mercer client advisory sent this month, which cautioned that the new disclosure rules could go into effect as early as fiscal years ending after December 15, 2003.

FASB’s renewed interest in ramping up disclosures grew out of criticism of current pension accounting after many pension plans “suddenly” found themselves in an underfunded status.  Last year, plans turned up funding shortfalls for the first time in nearly a decade. The soured stock market hurt plan assets just as low interest rates forced companies to put away more money to cover future benefit obligations (See  America’s Pension Crisis ).