The Committee on Investment of Employee Benefit Assets objected to FASB’s proposal to require more detailed disclosure of pension fund investment allocations and valuations, calling on the board “not (to) put in place a regime that will have little or no relevance in the future,” William F. Quinn, CIEBA chairman, wrote in a comment letter to the Financial Accounting Standards Board.
The proposal “will not lead to a meaningful increase in transparency and may reduce comparability,” Mr. Quinn wrote, calling for modifications in the proposal.
On debt, among other criticisms, Mr. Quinn wrote: “It appears that this proposed requirement may have been prompted by recent disruptions in the U.S. credit markets, resulting from the subprime mortgage meltdown. While no specific data is available, it appears that private sector pension plans, as long-term investors, have little direct exposure to subprime mortgage-backed securities, such as structured investment vehicles, collateralized debt obligations or auction rate securities.”
CIEBA is an association of CIOs of the largest corporate pension funds.
Among other letters, Mercer’s James F. Verlautz, principal, and Ethan E. Kra, chief retirement actuary, said the proposed disclosure standards could be costly to employers and called for a one-year extension.
Other companies filing comment letters objecting to the proposal and calling for extensive revisions include FedEx Corp., E.I. du Pont de Nemours and Co., United States Steel Corp., Johnson & Johnson, Chevron Corp., Walt Disney Co., Texas Instruments Corp., and Nortel Networks Inc.
