Surviving Black Monday and FAS 87: keys to controlling pension expense

Article Abstract:

Companies seeking to control pension expenses and liabilities have three available financial tools at their disposal: actuarial assumptions, actuarial methods, and investment policy. These approaches account for the three measures of actuarial liability: accumulated benefit obligation, present value of all future benefits, and projected benefit obligation. Also important to factor into the pension equation are stock market volatility and the new Financial Accounting Standards Board statement number 87 (FAS 87). Under FAS 87, the actuarial cost and amortization procedures are fixed, but actuarial assumptions, asset valuation methods and investment policies may be manipulated. Both settlement rate method and absolute settlement rate level must also be considered, along with salary scale of employees and return on assets. Change in investment policies is usually unnecessary if actuarial methods are applied.

Methods, Liabilities (Accounting), Laws, regulations and rules, Finance, Prices and rates, Insurance, Compensation and benefits, Accounting, Risk management, Pensions, Investment analysis, Securities analysis, Financial Accounting Standards Board, Pension Insurance Group of America Inc.

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Part-time CFOs bring results to young, fast-track companies

Article Abstract:

Because most new business enterprises are begun by engineers and marketing experts, the need for part-time chief financial officers (CFOs) by these new firms is growing. The part-time CFO performs finance services for a per diem salary that can be as high as $1,500. The use of part-time CFOs by a Silicon Valley start-up firm and by a New York-based clothier are described. As new business enterprises reach the $5 million mark, the CFO position generally stops being part-time and requires the attention of a full-time financial officer. Also, when these start-up firms merge into, or are acquired by, larger industry participants, the part-time CFO is among the first of the employees to be let go.

Management, Services, Chief financial officers, Managerial accounting, Controllership

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