"Book It, Danno;" Pension Funding to Hit Balance Sheets

Statement of Financial Accounting Standards Number 158 (or SFAS 158), recently issued by the FASB, will require balance sheet disclosure of pension plan status with particular emphasis on defined benefit plans. Under the new standard, overfunded plans will be recorded as assets and underfunded plans as liabilities; previously, note disclosure was sufficient in many cases. Additionally, SFAS 158 will require measurement of fund assets and obligations to be measured and reported at the end of the business's fiscal year. Due dates are as follows: December 2006 for publicly-traded businesses; June 2007 for other businesses on balance sheet recording; December 2008 for pension fund asset and liability measurement.

With the new standard, only highly overfunded pension plans or plans involving the very largest and most stable of businesses probably can remain as defined benefit plans. The push to defined contribution plans, which still will require some additional reporting under SFAS 158, will receive added momentum--as if there wasn't enough such momentum already.