Better Pension Disclosure

Blame current accounting rules that only require companies to disclose the basics about their pension plans. That allows them to release the broadest of generalizations about their stock, debt and other investments, and whether those assets are enough to cover future pension obligations.

That makes for a dark corner of corporate financial statements.

The good news is that some much needed sunlight may soon arrive. The Financial Accounting Standards Board is considering a proposal that would force companies to provide more detail on how they allocate and value their pension assets.

Should that go through, it would beef up the disclosures for the nation's defined benefit plans, which give workers a company-funded monthly check when they retire. That differs from defined contribution plans, often referred to as 401(k)s which let employees direct their own investments.

How corporate pension plans fare certainly matter, since they are intended to cover 44 million American workers and retirees.

Just look at what happened earlier this decade when the dot-com stock bust caused many plans to become severely underfunded, meaning what they owed to retirees exceeded assets by at least 10 percent. That deterioration in the plans' health left many companies with surging pension costs.

Those expenses became another reason, along with the ballooning costs of running defined benefit plans, why many companies have phased out the programs for new employees.

Now there is another financial crisis to worry about that. The turbulence in both stock and bond markets could roil pension assets, but that most likely won't show up in the annual pension report cards that companies will give as part of their 10-K securities filings.

Many plans may see their pension assets rise for 2007 because record-setting financial market gains early in the year offset the late-year losses. For instance, the Standard & Poor's 500 stock index tumbled 6 percent from October through the end of December, but still finished up 3.5 percent for all of 2007