Project Update

Disclosure Framework—Disclosure Review: Defined Benefit Plans

Last updated on February 21, 2018. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

Project Objective and Overview
Due Process Documents
*Decisions Reached at Last Meeting
*Tentative Board Decisions Reached to Date
*Next Steps
*Board/Other Public Meeting Dates
*Contact Information

Project Objective and Overview

The objective and primary focus of the disclosure framework project is to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements. Achieving the objective of improving effectiveness will require development of a framework that promotes consistent decisions about disclosure requirements by the Board and the appropriate exercise of discretion by reporting entities.

To achieve this objective, the disclosure framework project comprises two components: the Board’s Decision Process and the Entity’s Decision Process.

Currently, four disclosure areas are being evaluated as part of the disclosure framework project. Each review will include (1) evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s decision process and (2) promotion of the appropriate use of discretion by entities specifically within the Topic.

This page provides updates on the disclosure review of defined benefit plans (Section 715-20-50). For information on the other three disclosure reviews, see the following:
  1. Inventory (Section 330-10-50)
  2. Fair value measurement (Section 820-10-50)
  3. Income taxes (Section 740-10-50)
Additionally, disclosure requirements for interim reporting are being evaluated for modifications.

The FASB staff has developed a “Q&A: FASB’s Disclosure Framework Project” fact sheet, which can be viewed here.

Due Process Documents

On January 26, 2016, the Board issued a proposed Accounting Standards Update, Compensation–Retirement Benefits–Defined Benefit Plans–General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans. The due date for comment letters was April 25, 2016.

*Decisions Reached at Last Meeting (February 14, 2018)

The Board redeliberated the amendments in the proposed Accounting Standards Update, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirement for Defined Benefit Plans.
The Board decided to confirm the proposed amendments to remove the following disclosures:
  1. The amount and timing of plan assets expected to be returned to the employer
  2. The disclosures related to the June 2001 amendments to the Japanese Welfare Pension Insurance Law
  3. The related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employers or related parties and the plan
  4. The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year
  5. For nonpublic entities, the reconciliation of the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy.
The Board also decided to remove the disclosure of the effect of a one-percentage-point increase and the effect of a one-percentage-point decrease in the assumed health care cost trend rate for public entities.  The Board requested that the staff conduct further user outreach on the removal of that disclosure. 
The Board decided to:
  1. Add a disclosure of the weighted-average interest crediting rate for cash balance plans and other plans with a promised interest crediting rate, as proposed.
  2. Revise the proposed disclosure about the reasons for significant gains and losses by requiring only a narrative description of the reasons for significant gains and losses affecting the benefit obligation.
The Board decided to retain the current disclosure requirements for:
  1. The amount of the accumulated benefit obligation (ABO) for pension plans.
  2. The aggregate ABO and the aggregate fair value of plan assets with ABOs in excess of plan assets. The Board requested further research on the ways to disclose the aggregate information for underfunded (including unfunded) pension plans based on both the projected benefit obligation (PBO) and ABO benchmarks. 
  3. The organization of disclosures under the current guidance in Subtopic 715-20.
The Board decided not to add the following disclosures (as proposed):
  1. For plan assets, quantitative and qualitative disclosures from Topic 820 on fair value measurement about assets measured at net asset value (NAV) using a practical expedient.
  2. A description of the nature of the benefits provided, the employee groups covered, and the type of benefit plan formula.
The Board also decided not to add a mandatory disaggregated disclosure about pension plans or other postretirement benefit plans between domestic and foreign plans. The Board decided to retain the current disclosure requirement in paragraphs 715-20-50-2 and 715-20-50-4. That guidance allows aggregated disclosure unless (1) disaggregating in groups provides useful information or (2) the benefit obligations of the plans outside the United States for a U.S reporting entity or of foreign plans for a foreign reporting entity are significant relative to the total benefit obligation and those plans use significantly different assumptions. 

The Board decided not to consider removing, adding, or amending other disclosure requirements.

The Board also decided to require a retrospective transition method for these disclosure amendments.

*Tentative Board Decisions Reached to Date (As of February 14, 2018)

See Tentative Board Decisions Reached to Date

*Next Steps

The staff will complete redeliberations at a future meeting.

*Board/Other Public Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
*February 14, 2018 Board Meeting—Defined Benefit Plan Disclosures
July 13, 2016 Board Meeting—Defined Benefit Plan Disclosures
November 2, 2015 Board Meeting—Defined Benefit Plan Disclosures
July 9, 2015 Board Meeting—Defined Benefit Plan Disclosures
June 29, 2015 Board Meeting—Defined Benefit Plan Disclosures and Transition
August 20, 2014 Board Meeting—Defined Benefit Plan Disclosures and Appropriate Use of Discretion by Reporting Entities
June 11, 2014 Board Meeting—Defined Benefit Plan Disclosures and Potential Changes on the Basis of the Proposed Concepts Statement
April 4, 2014 Board Meeting—Field Study Results and Next Steps

*Contact Information

Lucy Cheng
Project Manager

Kelly Coyne
Postgraduate Technical Assistant

Francesca Roberts
Postgraduate Technical Assistant