Academic journal article Journal of Accountancy

AICPA Urges Expanding Pension Disclosures to Workers

Academic journal article Journal of Accountancy

AICPA Urges Expanding Pension Disclosures to Workers

Article excerpt

In a statement submitted to the House Labor-Management Relations Subcommittee, which is holding hearings on oversight of the U.S. Pension Benefit Guaranty Corporation (PBGC), the American Institute of CPAs proposed the adoption of specific measures to expand the information employers must provide to employees regarding their pensions.

The AICPA argued many Americans don't know the condition of their pension funds or how to find this information.

"It's no secret certain segments of the pension system are in trouble," said AICPA chairman Jake Netterville. "But to millions of Americans, the real facts about their own pensions are not known. Every employee should know whether his or her pension plan is fully funded, whether its investments are sound and whether the government will pay the promised benefits if the employer can't."

The AICPA proposals call on the Department of Labor to enhance the information companies provide to employees in the summary annual report (SAR)--the one source of information most pension plans are required by law to furnish annually to participants.

The SAR currently includes such information as plan asset values, income and expenses. However, it fails to make other disclosures the AICPA contended are essential to evaluating the financial soundness of a plan, including

* How much the plan has promised to pay participants. …

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