The New York State Society of CPAs has published a good article on pension accounting: "Pension Accounting: The Continuing Evolution." This exhibit to the article here [pdf] provides a summary of the new disclosure requirements, and this exhibit here [pdf] provides a summary of the disclosure requirements retained from the "old" SFAS 132R.
For those of you following the Medicare Part D Accounting issue closely, FASB has posted its February 18, 2004 Board minutes here and an Action Alert here summarizing what they have decided. You can access previous posts on the subject here.
Also, an accounting friend has provided the following insight regarding these developments:
In past two board meetings, FASB has pretty much settled where it's headed on Medicare Part D accounting. Within next several weeks, a dreaft staff position paper will be published, with a 30-day comment period. If FASB stays on schedule, the key effective date will involve fiscal quarters beginning after June 15, 2004, with a delayed effective date of measurement dates after September 15, 2004, for non-public companies with small plans. Three main actions will be necessary: (1) Employers must determine if their retiree health programs provide prescription drug coverage that is actuarially equivalent to the Medicare Part D coverage, in which instance the employer would be eligible for the special subsidy from the federal government; (2) If the employer determines that their retiree health plan is actuarially equivalent, then the effect of the subsidy payments must be measured and the accounting treatment to be prescribed in the forthcoming staff position paper must be calculated; and (3) Appropriate footnote disclosures for financial statements must be prepared. Any plan amendments (e.g., to make a plan actuarially equivalent) may involve additional actions and calculations for the accounting effects.
For more of this commentary on the developments, continue reading . . .
If an employer determines that its retiree health plan's prescription drug coverage is not at least actuarially equivalent to Part D and if no amendment is made to the plan to bring it to an actuarially equivalent level, then no action need be taken. If the employer cannot yet determine if its plan is actuarially equivalent (e.g., due to absence of regulatory guidance on that issue), then a disclosure should be made to that effect in financial statement footnotes.For employers with plans that are determined to be actuarially equivalent, the underlying accounting methodology to recognize the effect of the special subsidy involves reduction of costs under SFAS 106. The cost reductions attributable to future years of service are recognized as reductions in the service cost for each year that the subsidy is attributable. Any reduction in cost attributable to benefits earned to date is treated as a reduction in the accumulated postretirement benefit obligation (APBO). Reduction in APBO is not recognized immediately in the year of implementation, but rather is treated as an actuarial gain, to be recognized over future service periods under the rules of SFAS 106. If a plan amendment is made concurrent with accounting implementation (e.g., to make the plan actuarially equivalent), then the accounting treatment will essentially combine the gain from reduction of APBO for the subsidy with the increase in APBO from the amendment, amortizing any net gain according to the rules for gain/loss recognition and any net increase in APBO as an amendment.
Transition then depends largely upon whether or not the employer had elected immediate implementation versus delayed implementation under FAS 106-1 issued in January. If early implementation had been elected, and if the employer's methodology differed from the methodology now being set forth by FASB, then an adjustment for the cumulative effect of the change must be recognized in the first quarter of implementation under the new guidance, with reference back to the point of the immediate recognition. If the employer had deferred implementation, yet can reasonably determine its retiree prescription drug coverage to be actuarially equivalent, then a similar cumulative adjustment applies, but only back to the beginning of the first quarter that starts after December 8, 2003.
In a previous post here, I discussed how, in FASB's meeting on Wednesday, February 11, 2004, it was decided that "companies should book the amount of federal subsidy they expect to receive under the Medicare Act as a reduction of future benefit costs -- instead of as a stream of income from continuing operations." A friend who understands more than I do all of what is really going on in the accounting world with all of these recent developments has written:
Minor observation on the FASB meeting on Wednesday: I'm not sure that it yet has any practical effect. In January FASB had decided (FAS 106-1) that employers could elect either immediate implementation of accounting for the Medicare Part D special subsidy or else await the final conclusions of FASB's project to determine the correct accounting for that element. Any employer that elected immediate implementation must of course know that when FASB concludes its current project, then reversal or adjustment of the earlier accounting might be required; but I'm not sure FASB intends that an employer who moved with early adoption must change anything based on interim decisions within that FASB project. Thus, if an employer elected early adoption, then even if the employer and its accountant felt (as some may have) that the subsidy was outside the scope of SFAS 106, the most that this first step in FASB's follow-through project would do would be to put the employer on early alert of a change that will be necessary upon completion of the FASB project, which might not occur for another year or so.
Also, this from AccountingWeb.com: "FASB Sets New Rules for Cash-Balance Benefits." As stated in the article, last week FASB also adopted a definition for cash-benefit pension plans:
A cash-balance pension plan is a defined-benefit pension plan (as defined in the Glossary of Statement 87) that defines the promised employee benefit by reference to a notional account balance. An employees' notional account balance is increased with periodic notional principal credits and notional fixed or variable interest or investment credits, and may be increased for other notional ad hoc credits. Upon separation of employment, for any reason, by a fully vested employee, the employee is entitled to the notional account balance as either a lump sum or an actuarially equivalent annuity either immediately or at a future date. Subject to the terms of the pan or regulatory requirements, an employee may be entitled to a settlement amount greater than the notional account balance due to the crediting of future interest (or investment) credits that are not conditioned upon future service.FASB is formally reviewing rules governing the way companies measure cash-balance benefits.
Also, businesses that follow international accounting standards will have to start treating stock options as an expense, under a new rule issued today by the International Accounting Standards Board. You can access the press release issued by the IASB here entitled "IASB Issues Standard on Share-based Payment." Articles on the development:
(More on the stock option expensing debate here.)
Finally, Tech Central Station has this op-ed: "Green Eyeshade Killers." James Glassman writes:
Candidates are obsessed with "outsourcing," the alleged loss of tech jobs overseas. . . There's a far, far more dangerous threat to our global preeminence in technology. It involves an accounting change. Don't touch that dial! Accounting is boring, but this is important. Your job may depend on it."
The Financial Accounting Standards Board (FASB) has issued FASB Statement No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefits. According to the FASB News Release, the Statement seeks to improve financial statement disclosures for defined benefit plans. "These disclosures will provide investors with greater visibility into plan assets and a clearer picture of cash requirements for benefit payments and contributions to fund pension and other postretirement benefit plans," said FASB Project Manager Peter Proestakes. According to the News Release, the Statement does the following:
For the first time, companies are required to provide financial statement users with a breakdown of plan assets by category, such as equity, debt and real estate. A description of investment policies and strategies and target allocation percentages, or target ranges, for these asset categories also are required in financial statements.Cash flows will include projections of future benefit payments and an estimate of contributions to be made in the next year to fund pension and other postretirement benefit plans.
In addition to expanded annual disclosures, the FASB is improving the information available to investors in interim financial statements. Companies are required to report the various elements of pension and other postretirement benefit costs on a quarterly basis.
The guidance is effective for fiscal years ending after December 15, 2003, and for quarters beginning after December 15, 2003.
You can access FASB's FAQs about the Statement here.
Articles discussing the new disclosure requirements:
Mellon's Human Resources & Investor Solutions has an article on the new FASB pension disclosure rules which were proposed on November 26, 2003: "New Pension Disclosures Required in 2003 Financial Statements." The article notes that FASB has now decided to require the disclosure of investment strategy by all entities whether or not they disclose their target allocations. (You can access a previous post on FASB's proposed changes here.)
AccountingWeb.com also reports: "FASB Close to New Pension Reporting Rule."
The LA Times today reports in this article--"More Pension Plan Disclosure Ordered--on FASB's decision to require disclosure of investment strategies which companies use for their pensions. (See previous post here.) The article reports FASB as saying that it will order the changes "as part of efforts to shine a brighter light on corporate pension programs, amid fears that many such plans may be inadequate to meet promised benefits." The article quotes Lynn Dudley, vice president and general counsel for the American Benefits Council, who criticizes the decision by FASB on the grounds that it "could be used by employee groups to pressure companies to alter their investment strategies to suit a particular group's purpose." According to the article, Ms. Dudley notes that "to bow to such pressure would violate pension rules [i.e. ERISA] that require employers to be fiduciaries, acting in the best interest of all participants."
UPDATE: Plan Sponsor reports on the proposed pension disclosure rules: "Details Emerge on FASB Pension Disclosure Proposal."
Milliman USA has posted a very good "Client Action Bulletin" entitled "New disclosures for Pensions and Other Benefits." The Bulletin highlights what was decided by the FASB Board day before yesterday concerning financial statement disclosures for sponsors of pensions and postretirement benefits. For employers with calendar fiscal years, most of the new requirements will apply to the upcoming December 31, 2003 year-end financial statements.
According to the Bulletin:
After reviewing comments from companies, financial statement preparers, and financial statement users, the Board has affirmed its intention to change the disclosure rules, with most of the changes set to take effect as early as the end of 2003.
The Bulletin notes that the decisions made by the FASB Board incorporate several key modifications to the proposal issued this past September, "notably the elimination of a requirement that sponsors disclose expected rates of return segregated by major asset classes." The Bulletin states further that "the added disclosures could necessitate new calculations and may influence management decisions about pensions and other post-employment benefits."
Other articles on the subject:
The FASB website provides a great deal of information concerning the decisions made by the Board and you can access that information here.
Today's Federal Register contains the final regulations relating to golden parachute payments under section 280G of the Internal Revenue Code. The regulations which were mentioned here last Friday incorporate changes and clarifications to reflect comments received concerning the proposed regulations, primarily in these areas: the small corporation exemption, repayment of the excise tax, and the definition of change in ownership or control.
News regarding the IBM and Xerox cash balance plan decisions:
"Pension Rulings Roil Hundreds of Businesses: Companies Seek U.S. Role In Cash-Balance Plans.": Ellen E. Schultz for the Wall Street Journal reports today. The article discusses both the IBM and Xerox cash balance plan decisions handed down late last week. (You can access previous discussions on the IBM case here and previous discussions on the Xerox case here). With respect to IBM's plans to appeal, the article makes the point that employers will have reason to worry since the IBM appeal "will be heard in the Seventh Circuit, where it may be decided by one or more of the judges who just ruled against Xerox on appeal. These include Judge Posner, a highly regarded judge whose opinions have been cited by the Supreme Court, and a prolific writer of Erisa decisions that have had substantial impact."
Deepa Babington for Reuters has this: "IBM ruling turns promising pension move into headache."
Milliman USA has issued this Client Action Bulletin: "Emerging Developments for Cash Balance Plans."
Stephen Taub for CFO.com also reports: "Court Decision Big Blow to Cash-Balance Plans."
News regarding pension funding and accounting:
David Reilly discusses pension accounting and pension deficits in the U.K. in today's Wall Street Journal: "'How Much?' Is Just First Issue On Companies' Pension Deficits."
Dennis Cauchon reports for USA Today in an article entitled: "Pension peril hits W.Va. hardest." The article states that "the West Virginia teachers retirement system is the worst-funded public pension fund in the nation" and that it "has only 19% of the assets needed to pay current and future benefits." Another article for USA Today reports: "State pensions face loss of billions."
Lawrence B. Lindsey and Marc Sumerlin for the Washington Post make some very interesting comments regarding the pension funding crisis in this op-ed: "Herbert Hoover Pension Rules." The article makes the point that "[j]ust as the government works to discourage contributions during good times, it also forces companies to make excessive payments during bad times." Regarding fixes to the problem, the article states: "The best way to get out of any hole is to stop digging. Proposals in this area must specifically preempt collective bargaining contracts that allow pension benefits to rise automatically, even though the plan is underfunded and the company is in trouble."
"The Next Scrambled Nest Egg? Companies are struggling to meet their pension-plan obligations, and Washington is starting to worry. How your retirement plan could be at risk": Jyoti Thottam for Time Online reports.
News regarding health care:
Finally, "Mandated employer health insurance gains support" in California, reports Kathy Robertson for the Sacramento Business Journal via MSNBC.com. Richard Costigan, a lobbyist for the California Chamber of Commerce, states that if the legislation is passed it will create a Pandora's box on many levels, one of which is ERISA which makes self-insured plans exempt from state insurance laws.
Today's Federal Register contains the final regulations relating to golden parachute payments under section 280G of the Internal Revenue Code. The regulations which were mentioned here last Friday incorporate changes and clarifications to reflect comments received concerning the proposed regulations, primarily in these areas: the small corporation exemption, repayment of the excise tax, and the definition of change in ownership or control.
News regarding the IBM and Xerox cash balance plan decisions:
"Pension Rulings Roil Hundreds of Businesses: Companies Seek U.S. Role In Cash-Balance Plans.": Ellen E. Schultz for the Wall Street Journal reports today. The article discusses both the IBM and Xerox cash balance plan decisions handed down late last week. (You can access previous discussions on the IBM case here and previous discussions on the Xerox case here). With respect to IBM's plans to appeal, the article makes the point that employers will have reason to worry since the IBM appeal "will be heard in the Seventh Circuit, where it may be decided by one or more of the judges who just ruled against Xerox on appeal. These include Judge Posner, a highly regarded judge whose opinions have been cited by the Supreme Court, and a prolific writer of Erisa decisions that have had substantial impact."
Deepa Babington for Reuters has this: "IBM ruling turns promising pension move into headache."
Milliman USA has issued this Client Action Bulletin: "Emerging Developments for Cash Balance Plans."
Stephen Taub for CFO.com also reports: "Court Decision Big Blow to Cash-Balance Plans."
News regarding pension funding and accounting:
David Reilly discusses pension accounting and pension deficits in the U.K. in today's Wall Street Journal: "'How Much?' Is Just First Issue On Companies' Pension Deficits."
Dennis Cauchon reports for USA Today in an article entitled: "Pension peril hits W.Va. hardest." The article states that "the West Virginia teachers retirement system is the worst-funded public pension fund in the nation" and that it "has only 19% of the assets needed to pay current and future benefits." Another article for USA Today reports: "State pensions face loss of billions."
Lawrence B. Lindsey and Marc Sumerlin for the Washington Post make some very interesting comments regarding the pension funding crisis in this op-ed: "Herbert Hoover Pension Rules." The article makes the point that "[j]ust as the government works to discourage contributions during good times, it also forces companies to make excessive payments during bad times." Regarding fixes to the problem, the article states: "The best way to get out of any hole is to stop digging. Proposals in this area must specifically preempt collective bargaining contracts that allow pension benefits to rise automatically, even though the plan is underfunded and the company is in trouble."
"The Next Scrambled Nest Egg? Companies are struggling to meet their pension-plan obligations, and Washington is starting to worry. How your retirement plan could be at risk": Jyoti Thottam for Time Online reports.
News regarding health care:
Finally, "Mandated employer health insurance gains support" in California, reports Kathy Robertson for the Sacramento Business Journal via MSNBC.com. Richard Costigan, a lobbyist for the California Chamber of Commerce, states that if the legislation is passed it will create a Pandora's box on many levels, one of which is ERISA which makes self-insured plans exempt from state insurance laws.
That's what this article is reporting at FT.com: "US pension rules make investors nervous." The article reports that U.S. pension accounting is badly broken" and that balance sheets are "misleading." The article states: "Of the 500 S&P constituent companies in 2002, 63 reported net pension income when their pensions were in deficit." The article also reports that "FASB is likely to face pressure if IASB, the international accounting body, follows the path of the UK by adopting a rule that has forced British companies to disclose pension liabilities with brutal clarity."
Today's Federal Register.
More on the IBM Cash Balance Plan decision handed down yesterday and reported on here yesterday:
Albert B. Crenshaw for the WashingtonPost.com reports: "Judge Finds Age Bias in IBM Pensions: Experts Say Ruling Could End Other Employers' 'Cash Balance' Plans."
The American Benefits Council has issued a statement on the case. James Klein, ABC's President, states:
"Conversions to cash balance plans are currently the one good thing going on in the defined benefit pension plan system because they demonstrate a commitment by employers to remain within the defined benefit world. Other companies are exiting the system altogether. A decision like this sends one more negative signal to employers that 'no good deed goes unpunished' since it penalizes employers trying to provide their workers with a pension that is funded by the employer and guaranteed by the government, as opposed to requiring workers to rely solely on employee-funded retirement alternatives."You can also access a copy of the case on their website as well.
PlanSponsor.com reports: "Murphy’s Law: IBM Loses Cash Balance Ruling." (One time registration required.)
The Associated Press in this article--"IBM loses lawsuit over pensions: Federal judge rules firm discriminated against older workers at MSNBC.com quotes Mr. Klein as saying that "cash balance plans are 'currently the one good thing going' in an environment where many companies are dropping pension plans altogether and requiring employees to save for retirement on their own."
On other matters:
"FASB vetoes more disclosure on some pension changes.": Reuters reports. The article states that "FASB has agreed that companies do not need to disclose the impact of changes in assumptions used to calculate pension income or costs on earnings, arguing that existing and other proposed disclosure requirements are enough." You can also read about the decision at PlanSponsor.com in this article: "FASB Passes on Pension Assumption Change Reporting."
CFO.com has published this article: "Who Rules Accounting? Congress muscles in on FASB -- again." If you like charts, at the very end of the article is a chart showing the history of the debate over stock option accounting which you can access here.
Benefitslink.com has posted final Internal Revenue Code section 280G regulations (golden parachute). Benefitslink.com also reports the IRS has issued Revenue Procedure 2003-68 which provides guidance on the valuation of stock options solely for purposes of Internal Revenue Code sections 280G and 4999.
Articles on the events of yesterday regarding the House Ways and Means Committee mark-up of the Portman-Cardin Bill (HR 1776):
The most important statement, in my opinion, came from the Washington Post article:
The bill passed the committee with no Democratic votes. "I've been here nine years, and this is one of the saddest days we've had in the House," said Rep. Ray LaHood (R-Ill.). "What has happened to the Democrats is shameful; it's embarrassing to our party. I'm sad for our party, and I'm sad for the House."
The Post also reports:
"This is simple, serious and sad," said Ways and Means member Nancy L. Johnson (R-Conn.), adding that both parties made mistakes that were "destructive to the body."
Ironically, the Post also reports that many Democrats support the "bill that sparked yesterday's furor."
Arden Dale for the Dow Jones Newswire via SmartMoney.com reports that "Companies Face Changes In Pension Accounting."
Thanks to a reader for alerting me to what went on today on Capitol Hill regarding the debate over the Portman-Cardin bill (HR 1776). Several news sources are reporting that the Capitol Hill police were called Friday morning to a Ways and Means Committee markup after Democrats stormed out and locked themselves in a nearby library room to protest the GOP's handling of the bill. You can read about it in this article from the Wall Street Journal: "House Committee Passes $50 Billion Pension Bill." Also, Reuters via Yahoo! News reports--"House Panel OKs Pension Fix Amid Acrimony"--and the Dow Jones Newswire also via Yahoo! News reports--"US House Panel OKs Pension Formula Fix, 401(k) Boost."
UPDATE: Another article regarding the day's events via the Washington Post: "House Democrats Storm Out of Ways and Means Committee Chairman Calls Capitol Police to Restore Order."
FURTHER UPDATE: This statement from Treasury Secretary Snow on action taken by the House Committee on Ways and Means.
James Klein, president of the American Benefits Council, provides this op-ed for USAToday.com regarding pension disclosure: "Avoid information overkill."
Today's Federal Register contains proposed Internal Revenue Code section 401(k) and 401(m) regulations and final regulations pertaining to Internal Revenue Code section 419A(f)(6) plans. There will be more discussion of these regulations later . . .
The Federal Register also contains final regulations relating to a qualified subchapter S trust election for testamentary trusts under section 1361 of the Internal Revenue Code.
Bloomberg.com provides this report: "Warren Buffett Says That Pension Accounting Encourages Cheating."
Mary Deibel with Scripps Howard News Service for the Albuquerque Tribune Online reports: "Proposed changes in pension plans draw fire."
"Ernst Clients Face IRS Audits Over Stock Option Tax Shelters" reports Bloomberg.com.
Jill Elswick for BenefitsNews.com reports: "No Fun with Funds." The article tells us that according to the Profit Sharing/401(k) Council of America some 36% of plans do not have an investment policy statement. The article also provides some practical information for ERISA plan fiduciaries on techniques for retiring poorly performing 401(k) options.
Another good article from BenefitNews.com: "Auto rebalancing simplifies 401(k) asset reallocation." The article explains how automatic rebalancing is being added as a feature to 401(k) plans to help participants in meeting their investment goals. And this article from BenefitNews.com also reports on what many practitioners have known for a long time: "Workers and employers badly informed about retirement saving."
Reuters via Lycos reports: "GM Opposes Pension Disclosure Changes." The article quotes GM spokeswoman Toni Simonetti as saying: "The proposed new rule assumes you have one defined benefit plan. If you're a multinational and you have several plans, it's virtually impossible to comply with the (new) rule."
Arden Dale for SFGate.com reports FASB ruled yesterday that companies with defined benefit pension plans will for the first time have to issue quarterly financial reports on their plans. Currently, companies are only required to provide financial statements on their defined benefit plans once a year. FASB's decision is expected to become part of new pension disclosure rules that could go into effect as early as the end of this year. Peter Proestakes, FASB's pension project manager, said the group hopes to have a draft of the new rule out by August.
The New York Times calls pension accounting a "dismal science" in this article by Mary Williams Walsh: "Pension Reserve: What's Enough?" The article discusses the lobbying efforts going on in Washington for relief for certain industries from the pension funding rules. The article states that "[a}lways on the minds of pension policy makers is General Motors, whose $25 billion worldwide pension deficit is larger than its market capitalization of $21.8 billion." The Business Roundtable in this letter warns Congress that the whole economic recovery may be at stake if Congress does not provide relief. The letter states: "Companies cannot commit to building new plants, launching new research projects, or hiring new employees if that cash is needed to fund pensions."
This report--"Did Pension Plan Accounting Contribute to a Stock Market Bubble?"--by Julia Coronado and Steven Sharp, both with the Federal Reserve Board, can now be found online. The report was mentioned in an article at AccountingToday.com-- "GAAP for pensions: Sanctioned fraud must go" and discussed here in a previous post.
Today's Federal Register is here.
It really is true that the IRS is becoming more user-friendly! They have published today in their online version of their Employee Plan News the following:
New Revenue Procedure 2003-44
A red-lined version of the Revenue Procedure
A Chart comparing the substance of the old Revenue Procedure (Rev. Proc. 2002-47) and the new Revenue Procedure (Rev. Proc. 2003-44)
A topical index to the Rev. Proc. (very handy when it comes to trying to find something in that voluminous document!)
And, yes! it's true!, a powerpoint presentation of the changes made to EPCRS by this new Rev. Proc.
Also, coming this summer, says the IRS is a new Correction Programs CD-ROM with video clips and a comprehensive overview of the program.
More on pension funding with this article at PlanSponsor.com regarding a report by Credit Suisse First Boston (CSFB) Corp. accounting analyst David Zion who sees the decline in interest rates as being the main reason behind the whole pension funding crises. More on the report by Arden Dale for the Associated Press at SFGate.com.
Carrie Johnson for the Washington Post reports: "SEC Again Probes IBM Accounting." William Bulkeley for the Wall Street Journal points out that among the criticisms levied at IBM in past years by SEC staffers has been a criticism that IBM failed to disclose what proportion of its earnings came from gains on its overfunded pension fund. The article reports that IBM agreed to include much more info on pension income in its future annual reports (which it reportedly did in its 2001 annual report.) However, pension income issues do not appear to be the problem in this recent investigation.
Today's Federal Register is here. Elizabeth MacDonald for Forbes Magazine reports via Yahoo! News.com: "Pension Pangs: Some big companies are in for an earnings jolt when they own up to the reality of rotten pension fund performance."
Reuters has reported that the House Subcommittee on Capital Markets will hold a hearing, entitled "The Accounting Treatment of Employee Stock Options," on June 3, 2003.
Louis Lavelle for Business Week Online offers this commentary: "Shareholders Unite to Expense Options."
Benefitslink.com points us to this insightful article by Accounting Today--"GAAP for pensions: Sanctioned fraud must go"--and this article by Fred Reisch for PlanSponsor.com--"Doing Well While Doing Good"--which talks about the selection of socially responsible funds as an 401(k) plan investment option.
TRI Pension Services reports in its Recent Developments on the Field Assistance Bulletin issued by the DOL regarding allocation of expenses to participants and also reports on the new deemed IRA regulations.
Reuters just reported: "FASB to reconsider pension proposal under attack."
Today's Federal Register is here and contains the new proposed regulations implementing the notice requirements for the health care continuation coverage (COBRA) provisions of Part 6 of title I of ERISA. The new reg.'s, as mentioned in yesterday's post, set minimum standards for the timing and content of the notices required under COBRA and establish standards for administering the notice process. They also contain model forms for use by administrators of single-employer group health plans to satisfy their notice obligations.
This article by Reuters says Bush will sign the Jobs and Growth Tax Relief Reconciliation Act today and this article by MSNBC predicts that investors will benefit, particularly with respect to dividend-paying stocks and technology stocks.
FASB made some decisions about pension accounting yesterday. This excellent article--"FASB Names Key Pension Details Companies Should Disclose"--by Arden Dale for the Dow Jones Newswire at Yahoo! News.com provides a very good summary of the decisions affecting pensions. The article quotes FASB Chairman Robert H. Herz as saying that the Board chose "to propose a number of additional disclosures that could help users of financial statements better assess" the pension plan component and quotes Sherry Thompson, a FASB spokesperson, as saying more will be coming from FASB regarding pension disclosure by the end of the year. Today's edition of the Wall Street Journal has a very good article reviewing what's going on in the pension disclosure area. FASB is scheduled to make its decision regarding cash balance plan accounting today.
The SEC has issued proposed rules regarding disclosure required by Sections 404, 406 and 407 of the Sarbanes-Oxley Act of 2002. This article by the American Institute of Certified Public Accountants reports on the rules. In addition, today's edition of the Wall Street Journal also has an article by Deborah Solomon: "Fraud Detector: SEC Sets a New Rule Aimed at Companies' Internal Controls."