NEWS RELEASE 09/15/03

FASB Proposes Improvements to Financial Statement Disclosures for Pension and Other Postretirement Plans

Norwalk, CT, September 15, 2003—The Financial Accounting Standards Board (FASB) has issued an Exposure Draft, Employers’ Disclosures about Pensions and Other Postretirement Benefits that would improve financial statement disclosures for defined benefit plans. The project was initiated by the FASB earlier this year in response to concerns raised by investors and other users of financial statements about the need for greater transparency of pension information. The proposed change would replace existing FASB accounting guidance.

To provide the public with better and more complete information, the FASB plans to require that companies provide more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information. “The proposed disclosures will provide investors with greater visibility into plan assets and a clearer picture of cash requirements for benefit payments and contributions to fund pension and other postretirement benefit plans,” said FASB Project Manager Peter Proestakes.

For the first time, companies would be required to provide financial statement users with a breakdown of plan assets by category, such as equity, debt and real estate. The expected rates of return and target allocation percentages, or target ranges, for these asset categories also would be required in financial statements.

Cash flows would include projections of future benefit payments and an estimate of contributions to be made in the next year to fund the pension and other postretirement benefit plans.

In addition to expanded annual disclosures, the FASB seeks to improve the information available to investors in interim financial statements. Companies would be required to report the various elements of pension and other benefit costs on a quarterly basis.

The proposed guidance would be effective for fiscal years ending after December 15, 2003, and for the first fiscal quarter of the year following initial application of the annual disclosure requirements.

The Exposure Draft may be accessed from the FASB’s website.

About the Financial Accounting Standards Board and the Financial Accounting Foundation

Since 1973, the FASB has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors and others rely heavily on credible, transparent and comparable financial information.

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