PolyOne Corp., Avon Lake, Ohio, will move to a mark-to-market basis for all its pension accounting, immediately recognizing actuarial gains or losses on its pension plan in the year they occur instead of its current method of amortizing them over many years, the company announced Thursday.
The company’s total U.S. and non-U.S. pension assets were $354.6 million and its projected benefit obligations were $514.4 million as of Dec. 31, according to its 10-K report, filed Feb. 18. A breakout of the U.S.-only numbers was unavailable, but U.S. plans account for the majority of PolyOne’s pension assets and liabilities, said Amanda Marko, director, corporate communications.
“This change will improve the transparency of PolyOne’s operating results by more quickly recognizing the effects of economic and interest rate trends on plan obligations, investments and assumptions,” the company said in a statement Thursday.
“The change in accounting provides greater visibility to current period operating results and isolates pension gains or losses related to actual return on plan assets, changes in discount rates and other actuarial assumptions in one annual adjustment in the fourth quarter,” the statement said.
Historically, PolyOne generally amortized actuarial pension gains and losses into its operating results “over the average remaining life of the plan participants for the majority of its U.S. and foreign benefit plans and over the remaining service period of plan participants for certain non-U.S. benefit plans,” the company statement said.
PolyOne’s U.S. pension plans are closed to new participants and benefits are frozen for employees still participating in them, the statement said.