The financial health of corporate-sponsored pension plans is frequently in the news these days. Most of the information about these plans comes from the financial disclosures made by the sponsoring corporations. Because financial disclosure standards changed in 2006, with additional modifications in 2009, it is important for analysts, investors, and plan beneficiaries to understand these new standards as well as their strengths and weaknesses.

In this newsletter we explain the accounting basis of corporate-sponsored defined benefit (DB) pension plan financial disclosures and outline recent changes in the relevant Financial Accounting Standards Board (FASB) standards. We also discuss how the status of corporate-sponsored DB plans depends on discretionary assumptions and summarize related litigation issues.

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