Influences of Accounting Standard Changes on Pension Reporting – Historical Evidence From the US

Key Points

• This research aims to understand how accounting standard changes affect the reporting of private defined benefit pension plans in the US.
• Analyzed financial data from private defined benefit pension plans (DBPPs) from 1999 to 2015.
• Investigated the effects of SFAS 158 and the Pension Protection Act of 2006 on pension reporting.
• Examined changes in projected benefit obligation (PBO) discount rates post-implementation.
• Firms increased their PBO discount rates after the implementation of SFAS 158 and the Pension Protection Act.
• The impact of these changes occurred within less than one year.
• The increase in discount rates was more pronounced for firms with higher PBO values.
• There is a positive relationship between pension default risk and increased PBO discount rates, especially for firms with lower initial rates.

Abstract