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June 15, 2005 at 08:00 PM
Staff members at the U.S. Securities and Exchange Commission are suggesting that public companies should include pension plan results in their consolidated financial results.[@@]
Commission staff members have discussed pension reporting in a new report on ways to improve accounting for derivatives, leases and pensions.
Congress requested the report in the Sarbanes-Oxley Act of 2002, and SEC staff members based the results in part on a study of 100 big U.S. public companies and 100 smaller companies.
The authors of the report contend that current pension accounting rules that let public companies smooth plan earnings from one year to the next give the public a false impression of companies’ finances. The companies studied for the report said they had about 12% more assets than they need to fund their plans, but the SEC believes plan asset levels are about 11% lower than they ought to be, according to the report authors.
