Plan Curtailments and Settlements Under FASB ASC Topic 715 Relating to Plan Terminations (Part 1)
While curtailments and settlements can occur in other situations, this two-part article will discuss how curtailments and settlements work specifically with regard to plan terminations. A plan termination generally involves a curtailment (when benefit accruals are frozen), and a subsequent settlement (when assets are distributed under the plan termination). Part 1 of this article below describes the treatment of curtailments, and Part 2
(published in the February 2017 issue of the ACOPA Monthly
) describes the treatment of settlements. The example used throughout the two-part article is a plan sponsor with a calendar year fiscal year whose defined benefit plan terminates on 12/31/16 (with benefit accruals frozen effective on that date), and under which settlements occur on 12/31/17. The example is based on the assumption that pension benefits will not be provided under a successor pension plan.
Since the article includes complex tabular worksheets, it is published in pdf format. Click here to view it.
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