Some parties have raised concerns regarding this phenomenon since expectations of long-term inflation rates are assumed to be implicit in both the health care cost trend rate and the discount rate. In such situations, entities should consider all the facts and circumstances of their plan to determine whether the assumptions used (e.g., ultimate health care cost trend rate of 5 percent and a discount rate below that) are reasonable.

The Board also tentatively agreed that the final Employer Statement should retain the proposed note disclosure requirements for cost-sharing employers, with modifications tentatively agreed to by the Board with regard to requirements that would be the same for cost-sharing employers as for single and agent employers and for the issues mentioned above. At its April 2012 meeting, the Board discussed the issue of the timing of the measurement of information presented in single and agent employer notes and schedules of RSI. After reviewing those decisions, the Board considered whether information about contributions presented How To Read Financial Report Notes For Pension And Retirement Benefits in the notes to the financial statements or in the RSI schedules should explain the contributions that are reported in the schedule of changes of the net pension liability , the contributions that are reported for the financial reporting period of the employer, or both. With regard to the amount of actual contributions made during the financial reporting period, the Board tentatively agreed that employers should be required to disclose the actual contributions made during the financial reporting period, if the measurement period for the net pension liability and the financial reporting period are different.

How To Read Your 401(k) Plan Reports

The staff expects registrants to provide robust disclosures of their critical accounting policies and estimates in MD&A. Accordingly, a registrant’s disclosures in MD&A of critical accounting policies and estimates should not merely duplicate documentation from the accounting policy disclosures in the financial statement footnotes. The resulting increase in the projected benefit obligation when the effect of the High Court rulings is included in the measurement of the projected benefit obligation should be treated as prior service cost. In recent years, we have held discussions with actuarial firms regarding the incorporation of longer-duration bonds (bonds with stated maturities in the range of up to 80–100 years) in the development of the yield curve.

In particular, management should consider evaluating how bonds included in the bond universe are assessed for reliability and quality of pricing and the criteria used to evaluate and eliminate outliers. Note 1 – Summary of Significant Accounting PoliciesA. Fund Accounting – revised first paragraph; added investment and pension/OPEB trust funds to listing of fiduciary funds. Code External Investment Pool Fund – The external portion of the investment pools that are not held in trust and meet criteria listed above. Although this is considered a custodial fund, it should be reported in a separate external investment pool fund column under the custodial funds classification.

Financial Reporting Considerations Related to Pension and Other

These include investment trust funds, pension trust funds, private-purpose trust funds, and custodial funds. Code Special Revenue Funds – should be used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. Restricted revenues are resources externally restricted by creditors, grantors, contributors or laws or regulations of other governments or restricted by law through constitutional provisions or enabling legislation. Committed revenues are resources with limitations imposed by the highest level of the government (e.g., board of commissioners, city council, etc.) through a formal action and where the limitations can be removed only by a similar action of the same governing body.

As used in this document, “Deloitte” means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see /us/about for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations https://wave-accounting.net/ of public accounting. A sensitivity analysis estimating the effect of a change in assumption regarding the long-term rate of return. All other 518 codes not listed above – Allowed in all governmental funds or internal service funds.

STANDARDS & GUIDANCE

At each measurement date, the SEC staff expects registrants to use discount rates to measure obligations for pension benefits and postretirement benefits other than pensions that reflect the then current level of interest rates. The staff suggests that fixed-income debt securities that receive one of the two highest ratings given by a recognized ratings agency be considered high quality (for example, a fixed-income security that receives a rating of Aa or higher from Moody’s Investors Service, Inc.). However, the Board tentatively agreed that the final Statement should include additional clarification that the effects of changes in the discount rate on the total pension liability should be considered in the evaluation of significant changes. The Board also discussed the measurement date for information presented in schedules of RSI and tentatively agreed that measurement of the information in the schedule of changes in the net pension liability and the schedule of pension liability ratios should be coordinated with the measurement date for the net pension liability recognized in each period. However, it tentatively concluded that information in the RSI schedule of employer contributions as compared to actuarially determined employer contributions should be measured as of the employer’s fiscal year-end. The Board also tentatively decided that a description of the basis for the determination of an employer’s share of the collective net pension liability should be required to be disclosed in the notes to the employer’s financial statements.

The Board considered other respondent suggestions to modify the discussion in the Exposure Drafts related to the effect of the proposals on the requirements of Statement No. 47, Accounting for Termination Benefits. It tentatively decided to retain the discussion in the Exposure Drafts without modification. The Board will consider whether editorial changes to the discussions in the Summary and in the Basis for Conclusions of the documents might further clarify this issue when the drafts of the final Statements are reviewed. The Board continued its deliberation of issues raised by respondents to Exposure Drafts, Accounting and Financial Reporting for Pensions and Financial Reporting for Pension Plans . The Board tentatively agreed that the total pension liability component of the net pension liability should be determined at the measurement date either by an actuarial valuation as of that date or the use of update procedures to roll forward amounts to the measurement date from an actuarial valuation as of a date no more than 30 months prior to the employer’s fiscal year-end. The Board also tentatively affirmed the Employer Exposure Draft proposal that would require a single or agent employer to obtain, for financial reporting purposes, actuarial valuations of the total pension liability at least biennially and that the final Statements should indicate that more frequent valuations are encouraged.