About the Pension IndicatorTM
The Pension Indicator was developed as a resource to help employers monitor the estimated changes to their pension plan's funded status as it is reported for financial statement purposes under U.S. GAAP.
Example 1: If the market value of the pension plan's assets as of December 31, previous year, was $90 million and the projected benefit obligation as of the same date, December 31, previous year, was $100 million, the funded plan percentage was 90%. If the year-to-date Pension Indicator™ is +6%, the current estimated funded plan percentage would now be 106% of 90%, or 95.4%*. Similarly, if the year-to-date Pension Indicator™ is -7%, the current estimated funded plan percentage would be 93% of 90%, or 83.7%*.
Example 2: Assuming that the funded plan percentage as of the last day of the previous month was estimated to be 90%, then if the monthly Pension Indicator™ is +2%, the current estimated funded plan percentage would now be 102% of 90%, or 91.8%*. Similarly, if the monthly Pension Indicator™ is -1%, the current estimated funded plan percentage would be 99% of 90%, or 89.1%*.
* All other factors and variables holding steady.
The Pension Indicator™ is the property of USI Consulting Group and Clearstead. Use of the Pension Indicator™ is not, however, restricted if proper attribution to USI Consulting Group and Clearstead is made. Its use should be limited for estimation purposes only and USI Consulting Group and Clearstead do not assume any liability for its use or misuse by any other person not authorized by and acting on behalf of the firms.
