Brattle principals George Oldfield and Bente Villadsen and associate Urvashi Malhotra have authored a newsletter that discusses the accounting basis of corporate-sponsored defined benefit (DB) pension plan financial disclosures and outlines recent changes in the relevant Financial Accounting Standards Board (FASB) standards.

The newsletter also explains how the status of corporate-sponsored DB plans depends on discretionary assumptions and summarizes related litigation issues. According to the authors, recent changes to financial disclosure standards in 2006 and 2009 have made it increasingly important that analysts, investors, and plan beneficiaries understand these new standards as well as their strengths and weaknesses. The enhanced disclosure requirements, combined with increased litigation involving the accounting and disclosure of companies’ pension costs and obligations, have resulted in greater scrutiny of pension plans, particularly the decision methods and diligence of the plan’s fiduciaries.

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