Trends in SEC Comment Letters on Retirement Benefits

By ASPPA Net Staff • November 03, 2016 • 0 Comments
The Securities and Exchange Commission (SEC) is among the federal agencies that an employer must provide information to concerning pension and retirement benefits other than pensions (OPEB). A new report takes a look at the comments SEC staff have made to registrants on the SEC website concerning these benefits.

In “Stay Informed: 2015-2016 SEC Comment Letter Trends, Pension and Other Postretirement Benefits,” Pricewaterhousecoopers (PWC) looks at SEC comments posted on the agency’s site between July 1, 2015 and June 30, 2016. In the report, PWC HR Accounting Advisory Leader Ken Stoler says that PWC intends the report to help companies to better identify and understand the SEC staff’s focus on pensions and OPEBs.

The report says that of the SEC staff’s comments:

  • 70% concerned filings of Form 10-K, the annual report the SEC requires be filed that gives a comprehensive summary of a company’s financial performance;

  • 58% related to financial statements;

  • 34% related to disclosure, with some comments focusing on the deferred recognition of pension/OPEB amounts in other comprehensive income and the company’s policy for recycling them; and

  • 17% related to assumptions, including those for mortality, discount rate and other comprehensive income (OCI) adjustments.

When evaluated by industry, 84% of SEC comments concerned plans and finances in three sectors: industrial products (38%), retail (30%) and power and utilities (16%). Of this result, PWC says, “This may not be too surprising, considering that companies that continue to offer traditional pension plans tend to be more established companies, such as those in the industrial products sector.”