Blogging Employee Benefits

September 29, 2006

FAS 158: Pensions and Other Postretirement Benefits

Filed under: Accounting, OPEBs, Pensions — Fuguerre @ 10:29 am

The Financial Accounting Standards Board has published Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension Plans and Other Postretirement Plans, requiring sponsors to recognize the funded status of their retirement programs on the company’s statement of financial position. [News Release] For pension plans, the funded status is determined as the excess or deficit of the market value of plan assets over the projected benefit obligation. For other postretirement benefit plans, such as retiree health benefit plans or life insurance for retirees, the funded status is determined as the excess or deficit of the market value of any plan assets over the accumulated postretirement benefit obligation.

Plan assets and obligations must be measured as of the employer’s fiscal year-end statement of financial position.

An employer with publicly traded securities must apply the new reporting requirements and related new footnote disclosure rules for fiscal years ending after December 15, 2006. The new measurement date requirement applies for fiscal years ending after December 15, 2008.

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