Academic journal article Journal of Accountancy

Piecemeal Approach to Pensions

Academic journal article Journal of Accountancy

Piecemeal Approach to Pensions

Article excerpt

For two years, AcSEC and the FASB have been discussing changes in benefit plans accounting without getting to the point of issuing an exposure draft. But AcSEC was determined to release a proposed SOP even if it constituted only one small part of the whole.

"Originally, AcSEC had two proposed SOPs--one covering 401(h) plans and one on investments, covering such issues as what should be disclosed for master trusts," said Marilee P. Lau, who was chairwoman of the AICPA task force on 401 (h) plans. AcSEC combined the SOPs and subsequently added material modifying SOP 92-6, Accounting and Reporting by Health and Welfare Plans. "In March," she continued, "the FASB raised some objections to portions of the combined SOP. But since the board had cleared the 401(h) material, AcSEC decided to separate it from the combined material and expose only the 401(h) portion for comment."

Small issues for large entities

According to Lau, 401(h) issues generally are found only in very large plans, often in regulated utility-type companies such as oil, water and electric. …

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