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9.9 Other matters related to benefit plan financial reporting
Publication date: 15 Jun 2024
us Pensions guide
Employee benefit plans may be impacted by other matters such as class actions settlements and subsequent events.
- Class action settlements
An obligation arising from the settlement of a class action suit brought against a defined benefit plan related to the underpayment of benefits paid to participants should be reflected in the financial statements on the statement of accumulated plan benefits as an increase in the actuarial present value of accumulated plan benefits.
The settlement benefits should be recorded as benefits paid on the statement of changes in net assets available for benefits and on the statement of changes in accumulated plan benefits for the year in which they are paid to the participant.
The guidance in ASC 450 should be followed when evaluating the impact of a class action suit prior to settlement.
- Subsequent events
ASC 855 provides guidance related to the evaluation of subsequent events for potential recognition or disclosure in the financial statements. Plans filing on Form 11-K are considered SEC filers under this standard. As such, subsequent events should be evaluated through the date that the financial statements are issued. The subsequent reissuance of the financial statements for filing with the DOL would not require updating of subsequent events procedures beyond the original issuance date unless a revision to the financial statements was required.
Plans that do not file on Form 11-K do not meet the definition of an SEC filer. For those plans, subsequent events should be evaluated through the date the financial statements are available for issuance. The financial statements should include disclosure of the date through which subsequent events have been evaluated and whether that date represents the date the financial statements were issued or available to be issued.
For defined benefit plans that present beginning of year benefit information, this evaluation should consider events or transactions, including significant plan amendments, occurring after the latest benefit information date but before the financial statements are issued or are available to be issued. See discussion of subsequent changes to mortality assumptions in PEB 9.4.4.
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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