FN #12.C-Fair Value Measurments of Plan Assets

[RobM-BCBSMI]

With Footnote #12.C - Fair Value Measurements of Plan Assets, is the intent to combine all plan assets for both pension and postretirement plans into a single table? Prior to 2019, we only had pension trusts but at the end of 2019 we created and funded two retiree medical plans. If we are to report all of these plans into a single table, should we report these plans as one line item?

[Glenn]

Hello Rob,
I just relooked at the instructions and notes for ALL parts of Note 12. Interesting enough is that for other parts of Note 12 there is a "separate column " for Pensions and Post Retirement Benefits as there is separate funding and calculations for each of these defined benefit liabilities.
I do see in the instructions they ask for the Fair Value of the Plan Assets.
But the Pension ABO - Accumulated Benefit Obligation and Post Retirement ABO - Accumulated Benefit Obligations are indeed separate distinct liabilities. This being said I would recommend doing a Fair Value table for the Plan Assets supporting the Pension PBO Liability and a different table for the Plan Assets supporting the Post Retirement PBO Liability.

The NAIC is not requiring they be split currently in Note 12C in the instructions but strategically if your company is offering both a Pension Plan and a Post Retirement Plan you should check with the Investment accounting and asset management groups as to how the assets matching these liabilities is managed.

Here is the upfront discussion from the NAIC instructions for Note 12:

The disclosures required for this Note shall be aggregated for all of a reporting entity’s defined benefit pension plans and for all of a reporting entity’s other defined benefit postretirement plans unless disaggregating in groups is considered to provide useful information or is otherwise required by SSAP No. 92—Postretirement Benefits Other Than Pensions or SSAP No. 102—Pensions. Disclosures shall be as of the date of each statement of financial position presented. Disclosures about pension plans with assets in excess of the accumulated benefit obligation generally may be aggregated with disclosures about pension plans with accumulated benefit obligations in excess of assets. The same aggregation is permitted for other postretirement benefit plans. If aggregate disclosures are presented, a reporting entity shall disclose:

The aggregate benefit obligation and aggregate fair value of plan assets for plans with benefit obligations in excess of plan assets as of the measurement date of each statement of financial position presented.
The aggregate pension accumulated benefit obligation and aggregate fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets.

When they say aggregate the plans, they are really referring to multiple pension plans to be combined or multiple post retirement plans to be combined.
Again I would recommend a separate table for the Pension Plan Assets Fair Value and a different table for the Post Retirement Plan Assets Fair Value.
( my caveat is to check with Investment Operations /Investment Accounting as to how the assets supporting these Liabilities is managed and subsequently reported)

Regards,
Glenn S Sackett

[RobM-BCBSMI]

Thank you Glen! Just to clarify for purposes of completing the Electronic Footnote portion, if we opted to provide a separate table for Pension and one for Postretirement plans.

On the applicable electronic footnote section, we have the ability to add lines in the one table but not the ability to create a second table. If we opted to include two separate tables in our footnote, should we create a section for Pension Plan and then a section for Postretirement plans on the one table? Or just report the plan assets on a combined basis; which would look different than the footnote itself.

[Glenn]

Hello again Rob,
Your questions and my responses in Red:
On the applicable electronic footnote section, we have the ability to add lines in the one table but not the ability to create a second table. If we opted to include two separate tables in our footnote, should we create a section for Pension Plan and then a section for Postretirement plans on the one table? YES that is what I would do as that is consistent with other sections of Note 12 where they break out Pensions and PBOP in separate columns. In this case separate sections by line in one table
Or just report the plan assets on a combined basis; which would look different than the footnote itself.