With uncharacteristic decisiveness, the Financial Accounting Standards Board acted quickly last November to create a new major project. In doing so, it responded to growing alarm about the critical state of defined-benefit pension and other post-retirement benefit plans, and burgeoning criticism of the low quality of reported information about those plans.The crisis
The crisis has been growing for the last five years, characterized by frequently huge funding deficits, such that the collateral in the benefit trusts is inadequate. The immediate causes include low returns on fund investments, while liabilities have ballooned. The obligations have grown for at least three reasons: unwise benefit increases in lieu of current raises; inevitable compounding interest over decades; and lower market interest rates that raised the present values of the expected future cash payments.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access