FASB recognition of future plan amendments(specifically EGTRRA)

[Guest guppy]

Plan Year and fiscal years are calendar years. Plan is amended for EGTRRA as of 9/30/2003, the extension deadline for prototypes. Do you need to recognize the increase in the comp limit in determining the 2003 pension expense? What if you don't know how the amendment will be written (retrospective or prospective)?

Also, I believe there is a materiality argument as to whether this recognition need be via the prior service cost or gain/loss, correct?

[david rigby]

I agree with your comment RE materiality. But be carfeul who is making that determination.

WRT recognizing the effect of change in comp limit(s), it seems appropriate to include it if you know it. If the actual amendment wording differs from what you expected / valued, then there might be 3 choices:

- consider re-determining the NPPC, or

- include the difference in the next year's NPPC, or

- let it fall into accumulated g/l (depending on materiality).