ASC 715 and IAS 19 pension and retiree medical accounting

Optimizing Foundations prepares the accounting valuations and disclosures that sponsors of defined benefit pension and retiree medical plans need at year end under ASC 715 and, for subsidiaries of foreign parents, IAS 19. The work covers open plans, frozen plans and plans in wind-down, and the interim remeasurements that curtailments, settlements and significant events require.

What is included

• Pension under ASC 715-30. Projected benefit obligation, net periodic pension cost by component, funded status for the balance sheet, other comprehensive income, the expected return and discount rate development, and the full footnote disclosures.
• Retiree medical under ASC 715-60. Accumulated postretirement benefit obligation, net periodic cost, claims cost development from the plan's own experience, the implicit subsidy for pre-65 retirees and the health care trend assumption, with sensitivity.
• IAS 19. Defined benefit obligation, net interest, remeasurements through other comprehensive income and the disclosures a foreign parent's auditors expect, on the parent's reporting calendar.
• Discount rate. Developed from a high-quality corporate bond yield curve applied to the plan's own projected cash flows, with the documentation the auditors request.
• Events. Curtailment accounting on a freeze, settlement accounting on lump sum windows, annuity purchases and terminations, and the remeasurement of the obligation when a plan is amended.

How the work runs

The timetable is agreed with the auditors before year end. Data is reconciled to the prior valuation and to the trust. Assumptions are discussed with the finance team before the valuation runs, so the discount rate and trend are settled rather than disputed in January. A second credentialed actuary reviews the disclosures before delivery. For sponsors who track the funded status during the year, the firm's pension monitor and discount rate analysis are available between valuations.

A recent engagement

A manufacturing company terminating its pension plan needed final-year ASC 715 disclosures with every balance reconciled to zero. The firm prepared the settlement accounting, the final disclosures and the support the auditors requested through sign-off. For a global health nonprofit, the firm delivered retiree medical results on a published discount curve, in the prior year's report format, with a locked archive of every input.

Common questions

How quickly can year-end disclosures be delivered? For a frozen plan with clean data, within three weeks of receiving the year-end asset statement. The timetable is set with the auditors in advance.

Can the firm produce results monthly or quarterly? Yes. Interim remeasurements and a monthly accounting dashboard are available for sponsors who report to a parent or a board between year ends.

Every deliverable described here is reviewed by a second credentialed actuary before delivery. This page is general information about the firm's services and is not advice for any specific plan.