Norwalk, Conn. (Dec. 2, 2003)  -  Following weeks of debate the Financial Accounting Standards Board voted to adopt a change that would require U.S. companies to disclose the investment strategies they use in their traditional retirement plans.

The decision is a part of larger initiative by FASB to increase companies' reporting on their pension plans. Under the new rule companies will have to make public the proportion of stocks, bonds, real estate, private equity and other investments they hold in their pensions.

FASB has said it will issue the new disclosure requirements later this year.

At the same meeting, FASB also decided on a formula by which all plan sponsors will have to start reporting their expected future benefit payments. Under the adopted method, a company will have to report how much it expects to pay during each of the next five years, as well as total expected payments for the five years following that initial period.

Board members also voted on a timetable for companies to start making the new disclosures.

Much of the reporting will begin this year, but companies will have until 2004 to make some disclosures. For example, companies won't have to report estimated benefit payments until 2004, and will have until then to begin reporting on total assets in the retirement plans of their foreign divisions.

 — WebCPA staff

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