FASB 87
What Does FASB 87 Mean?
FASB 87 is a statement issued by the Financial Accounting Standards Board (FASB) that aimed to enhance pension reporting. After analyzing 130 reports, the Board provided recommendations for improvement based on a survey that concluded in December 1990.
Insuranceopedia Explains FASB 87
The survey revealed that the most popular pension plans, in order of preference, were as follows:
The statement required companies using these plans to disclose the weighted average assumed discount rate and the rate of compensation. Among other requirements, it mandated the disclosure of underfunded pension plans and prohibited corporations from using deductions for tax purposes. Defined benefit plans, the top-ranked option in that survey, usually pay retirees through group annuity contracts that life insurers issue, which work much like the individual annuities consumers can buy on their own for retirement income.