FASB to Mull Review of Some Cash-Balance Pension Rules

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http://ap.tbo.com/ap/breaking/MGAPO5QKSKD.html

FASB to Mull Review of Some Cash-Balance Pension Rules
By Arden Dale The Associated Press

NEW YORK (Dow Jones/AP) - The body that sets U.S. accounting standards may start a limited review of rules governing how companies measure benefit obligations in controversial retirement plans known as cash-balance pensions. The Financial Accounting Standards Board will consider whether to add the cash-balance project to its formal agenda at a meeting next week, it said in an item posted on its Web site late Thursday. <snip>

The cash-balance project would likely be separate from a wider-ranging FASB pension project currently underway to increase the amount of information companies report about their traditional pension plans. <snip>

Embraced by employers in the past, cash-balance pensions have attracted a huge amount of controversy recently, leaving their future uncertain. At issue are concerns that the pensions - which combine elements of traditional plans with 401(k)s - don't pay older workers their fair share of benefits. Though the debate dates back years, and even prompted the Internal Revenue Service to stop approving new cash-balance plans in 1999, companies have maintained and adopted the pensions nonetheless. But now, events have deepened a chilling effect that began with the IRS freeze.A major development was a court ruling in July against International Business Machines Corp. in a class-action lawsuit claiming its cash-balance pension discriminated against older workers.