How does the market price pension accruals?

We use a cross-sectional valuation model that distinguishes between the operating and financial activities of the firm to examine the repercussions of three main alternative measures of pension expense. The GAAP Method recognizes a smoothed net pension expense, the NETCOST Method includes the excess of interest cost over the actual return on pension plan assets, if and only if this number is positive, and the FV Method substitutes the fair value in place of the smoothed pension expense. Three alternative fair value estimates of pension expense are examined: the first includes the expected return on plan assets and fair value other costs; the second includes the actual return on plan assets and net fair value other costs; the third includes the expected and the unexpected return on plan assets, along with net fair value other costs. Results from OLS regressions are consistent with the GAAP Method being relevant while the market appears to value the unexpected return included in the FV Method. Additional analyses from jack-knife (out-of-sample) regressions confirm the OLS findings. Further, we show that the multiples assigned to the alternative measures of pension expense differ based on the funding status of pension plans. The results are robust to various sensitivity checks

Reinventing the Risk Sharing Mechanism of Defined Benefit Pension Plans

In this paper, I will introduce several new mechanisms of risk sharing regarding occupational retirement provisions, based on the analysis of present risk sharing between sponsoring employers and plan participants, individual participants and participants as a group, active members and beneficiaries (including deferred members), etc. Among others, I will introduce "Ring-fenced" DB (RfDB) plans, which introduce "share" structure into contributions and reserves, prohibit "lending" from active members to beneficiaries when the plan is in an underfunded status (actuarial deficiency), and allow temporary benefit reductions within prescribed ranges according to the funding level. The risk active members bear will be eased in RfDB plans, and market interest risk sponsoring employers bear will also be eased, because some portion of benefits becomes conditional. RfDB plans allow investments with greater risk tolerance, which may benefit both labor and management from a long-term perspective. It will also be possible to ease funding rules substantially for RfDB plans. It is said that DB plans are on the verge of extinction mainly by the threats from accounting standards. Taking this into account, it is necessary to expand the variation of risk sharing mechanisms in occupational retirement provisions."Ring-fenced" DB plan, "Retrospective" DB plan, Sequential plan, Combination plan, Collective DC plan, DC conversion

Ford Foundation - 2009 Annual Report

Contains president's and board chair's messages; grantee profiles; governance and program information; grants summary; financial statements; and lists of board members and staff. HTML Version contains detailed grantee profiles and link to grants database

Checklists and illustrative financial statements for employee health and welfare benefit plans : a financial accounting and reporting Practice aid, June 1997 edition

https://egrove.olemiss.edu/aicpa_indev/1833/thumbnail.jp

Checklists and illustrative financial statements for employee health and welfare benefit plans : a financial accounting and reporting Practice aid, May 1993 edition

https://egrove.olemiss.edu/aicpa_indev/1829/thumbnail.jp

Proposed statement of position : accounting and reporting by health and welfare benefit plans : proposed amendment to AICPA audit and accounting guide, Audit of employee benefit plans;Proposed statement of position : accounting and reporting by health and welfare benefit plans : proposed amendment to AICPA audit and accounting guide, Audit of employee benefit plans; Exposure draft (American Institute of Certified Public Accountants), 1991, Sept. 5

This proposed statement of position (SOP) would amend chapter 4 of the AICPA Audit and Accounting Guide Audits of Employee Benefit Plans, as of March 31, 1991 (hereafter referred to as the guide). This proposed SOP updates the guide to conform to the following accounting standards: 1. Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 105, Disclosure of Information About Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk 2. FASB Statement No. 106, Employers\u27 Accounting for Postretirement Benefits Other than Pensions, as applicable This proposed SOP also makes the following changes or clarifications in accounting and reporting requirements set forth in the guide: 1. The objective of financial reporting by a defined-benefit health and welfare plan has been clarified (see paragraph 19). 2. Defined-benefit health and welfare plans, both single and multiemployer, should account for and separately report benefit obligations, including postretirement benefit obligations (see paragraphs 36 through 49). 3. The requirement to recognize claims incurred but not reported has been clarified (see paragraph 39). 4. Benefit obligations should not include death benefits actuarially expected to be paid during the active service period of participants (see paragraph 36). 5. Defined-contribution health and welfare plans are distinguished from defined-benefit health and welfare plans (see paragraphs 3 and 23). 6. The requirements for determining the obligation for accumulated eligibility credits have been clarified (see paragraph 43). The recommendations in this proposed SOP are effective for audits of financial statements for plan years beginning after December 15, 1992; the application of this proposed SOP to plans with no more than 500 participants in the aggregate shall be effective for plan years beginning after December 15, 1994. Earlier application is encouraged. Accounting changes adopted to conform to the provisions of this proposed SOP shall be made retroactively. Financial statements of prior plan years are required to be restated to comply with the provisions of this proposed SOP only if presented together with financial statements for plan years beginning after December 15,1992. If accounting changes were necessary to conform to the provisions of this proposed SOP, that fact shall be disclosed when financial statements for the year in which this proposed SOP is first applied are presented either alone or with financial statements of prior years.https://egrove.olemiss.edu/aicpa_sop/1558/thumbnail.jp

Auditing multiemployer plans

https://egrove.olemiss.edu/aicpa_guides/1378/thumbnail.jp

Accounting and reporting by health and welfare benefit plans, August 3, 1992 : amendment to AICPA audit and accounting guide, Audit of employee benefit plans; Statement of position 92-6;

https://egrove.olemiss.edu/aicpa_sop/1004/thumbnail.jp

Checklists and illustrative financial statements for health and welfare benefit plans : a financial accounting and reporting Practice aid, July 2004 edition

https://egrove.olemiss.edu/aicpa_indev/1840/thumbnail.jp

Checklists and illustrative financial statements for employee health and welfare benefit plans : a financial accounting and reporting Practice aid, May 1996 edition

https://egrove.olemiss.edu/aicpa_indev/1832/thumbnail.jp