Corporate Governance

Federal Intervention in Pension Accounting

By Jay D. Dean

Legislation introduced on December 2, 2010 by House Republicans would require state and local government pension funds to report pension liabilities to the Treasury Department using a uniform set of accounting standards or be denied tax-exempt borrowing.

H.R. 6484, the Public Pension Transparency Act, mandates that pension liability estimates be based on U.S. Treasury bond rates.  The change would force government pension funds to use more conservative accounting than many public and corporate funds currently use to calculate fund levels, resulting in larger apparent liabilities.  State and local governments that do not comply would not be permitted to sell tax-exempt bonds. 

The bill has been referred to the House Committee on Ways and Means, but no other legislative action has been reported.

-- By Pomerantz Associate Marie L. Oliver

Full post as published by PomTalk on December 14, 2010 (boomark / email).