New Accounting Rules

The regulatory environment is continually evolving, with new rules for funding and financial reporting continuously being introduced, and new paradigms for funding and investing are emerging.

• The Pension Protection Act of 2006 (PPA) requires that plan sponsors fund current obligations much more rapidly and provides incentives for sponsors to keep funding levels above certain thresholds to avoid benefit restrictions and notice requirements. Under PPA, liabilities are valued under one actuarial method using market interest rates, and smoothing of asset gains/losses is limited, resulting in increased short-term volatility.
• Statement of Financial Accounting Standards No. 158 (FAS 158) requires plan sponsors to recognize unfunded benefit obligations in their entirety on the balance sheet.

Buck can help you reassess your strategies in response to change. We can help you understand and quantify risks over different time horizons and incorporate those risks into the broader risk management of your organization.