Volume 20, No. 3


The New Attention On Pensions:  Hardly a year goes by without one aspect or another of pension accounting being questioned by investors.  Some years it’s just the sheer poverty of the funds that attracts attention; other years, it’s the construction of the benefit obligations that jangles investors’ nerves.

This year, it’s something entirely different.  Several companies have recently decided to improve their accounting for pensions and they’re taking a very conservative approach - and it’s unusual to hear “conservative” mentioned in the same breath as pension accounting.  These firms are writing off great chunks of their past losses that have been hanging around for years.  While they’re to be commended for taking the high road, their timing is splendid.  The most painful part of the change is pushed back in time to three years ago during the depths of the financial crisis -a time when they wouldn’t have dreamed of recognizing investment losses.  It also happens to set up a very pleasant earnings trend, something sure to please unquestioning investors.

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