Josh Barro's opinion article on Bloomberg View "Why Better Reporting Won't Lead To Healthier Pensions" provides an interesting view of the accounting rules regarding pension disclosures approved yesterday by the Government Accounting Standards Board. The new accounting rules require many state and municipal pension funds to use more conservative assumptions (a lower discount rate) when valuing their liabilities. By doing so, the size of the unfunded liabilities of these funds can be highlighted to the general public. But Barro points out that this disclosure, while a good first step, doesn't require state and local governments to reform their pension systems. Barro argues that the rules should also deal with the required cash flows, not just the stated liabilities. In his view, showing the required cash flows could provide needed pressure to states and local governments to take action to address these pension issues. Here's the link: http://www.bloomberg.com/news/2012-06-26/why-better-reporting-won-t-lead-to-healthier-pensions.html
Here's a link to my prior post on the GASB pension accounting rules:
http://www.allenlatta.com/1/post/2012/06/new-accounting-rules-to-highlight-public-pension-shortfalls.html
Here's a link to my prior post on the GASB pension accounting rules:
http://www.allenlatta.com/1/post/2012/06/new-accounting-rules-to-highlight-public-pension-shortfalls.html
