When an employer divides one plan into two or more pension plans, the employer should first remeasure the plan based on current assumptions at the time of the plan division if it is determined to be a significant event of the plan. ASC 715 requires interim remeasurement of a plan if there has been a significant event associated with the plan. While "significant" is not defined in ASC 715 or other benefits literature, the significance determination for this purpose is based on the impact to the plan in question, not on the potential impact of the event on the financial statements. As the unit of account for pension accounting is the plan, the significance determination should be evaluated separately for each plan. The framework for evaluating whether a curtailment is significant as described in PEB 4.2.2 may be appropriate to consider in assessing whether the division of the plan is significant. This would generally be applied only to the overall impact on the benefit obligation.

If the portion of the plan that will be separated from the remaining plan is determined not to be significant, the plan assets and obligations would not need to be remeasured at the date of the division. However, the plan assets and obligations will still need to be divided on the date of the division. In this case, the funded status, plan assets, and amounts in AOCI should be allocated using a systematic and rational approach, based on the balances at the previous measurement date adjusted for activity through the date of plan division (for example, benefit payments and contributions).

The employer would then allocate the net gain or loss included in AOCI in proportion to the projected benefit obligations of the two surviving plans. Prior service cost included in AOCI should be allocated to the surviving plans based on the applicable individuals included in the employee groups covered. See additional guidance in ASC 715-30-55-90 through ASC 715-30-55-92 and ASC 715-30-55-124 through ASC 715-30-55-127.

In a plan merger, similar amounts of the predecessor pension plans are aggregated and a single amortization schedule for each of the combined amounts is used. For example, total net gain or loss in accumulated other comprehensive income is amortized using the average remaining service period of the combined employee group. However, the prior service cost included in accumulated other comprehensive income of each pension plan at the time of the combination would continue to be amortized as previously determined based on specific employee groups covered. See additional guidance in ASC 715-30-55-88 and ASC 715-30-55-89 and ASC 715-30-55-122 and ASC 715-30-55-123.