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Congress Pushes for Pension Accounting Changes by Year-end

Sep 24, 2013

More than 70 members of the House of Representatives from both parties asked SEC Chair Mary Jo White and FASB Chairman Russell Golden to amend the pension funding provisions in U.S. GAAP by the end of 2013.

“If the FASB does not modify GAAP or the SEC does not direct issuers to comply with a revised accounting standard, using the authority provided to the SEC in federal securities laws, publicly traded companies and beneficiaries will not be able to fully realize the stabilizing effects of Section 40211,” the lawmakers wrote on September 20.

The members of Congress were referring to a section in the Moving Ahead for Progress in the 21st Century Act (MAP-21), a transportation spending bill enacted in July 2012 that dealt with numerous issues related road safety. Tucked into the bill was a provision that called for public companies to stabilize their forecasted returns on pension assets.

The bill’s backers say the feature, called segment rate stabilization, is a more accurate measure of pension returns and should aid corporate balance sheets and make it easier to raise capital from investors.

The lawmakers who signed the letter didn’t offer details on the law’s differences with U.S. GAAP, but they asked that the FASB amend its standards by the end of the year to bring them into agreement with Section 40211.

A spokeswoman for the SEC said it was not the agency’s policy to make a public statement on individual comment letters.

“The FASB is reviewing the letter, submitted by members of Congress, requesting that the FASB amend U.S. GAAP to create greater consistency with current pension funding rules,” said a FASB spokeswoman in an e-mail response to a request for comment. “As with all stakeholder feedback, we will carefully consider the input we receive from Congress on this important issue.”