Accounting for Pension Plans

The Statutory Accounting Principles Working Group held a conference call on July 22, 2008, to discuss outstanding Issue Papers 132 and 133.  These Issue Papers were exposed for comment late in 2007 and contain proposed new accounting guidance for pension and other post-employment benefit plans.
The proposed guidance within the Issue Papers is very similar to the GAAP guidance in FAS 158, which became effective for non-public companies for the year ending December 31, 2007.  The most significant change for many insurance companies will be that under the new guidance, companies would be required to record a liability for any deficiency in the funding of defined benefit pension plans or other post-employment benefit plans on the balance sheet versus disclosures in the notes as prescribed by current statutory guidance.  This would be required for 2009 financial statements. 

 

Several specific issues were discussed on the call and the Working Group decided that more information was needed regarding several topics that warranted further discussion.  The Working Group plans to modify both Issue Papers to reflect any changes that are needed and at that point the Issue Papers will be re-exposed for comment.  No specific timeline was mentioned for this process.

We will continue to follow these discussions and provide updated information on this topic.