The Ticking Time Bomb of Pension Fund Deficits and Other Special Items

Abstract

In the past 10 years, pension plans in the United States have transitioned from being primarily defined-benefit plans to defined-contribution plans. Nonetheless, defined-benefit plans still loom large, and how a company handles its pension plan affects not only the plan but also the company as a whole. Thus, understanding pension accounting and how plans manage their assets can shed some light on pension accounting gimmicks as well as the current pension funding crisis.