Future pension accounting changes — implications for hospitals
At a glance
This article reprinted from Healthcare Financial Management, May 2011 addresses how the proposed rules in accounting for defined benefit plans may affect hospitals’ statement of operations and affect the time, effort, and cost to comply with periodic financial reporting requirements.
The prospect of pension accounting change on the horizon- coupled with rising pension costs, lower utilization rates, declining payment, and the convergence of sectors and organizations within the health industries- has created a perfect storm for hospitals and health systems, many of which are wondering if now is the time to make changes in their benefit plan strategies.
Whether following the guidelines of the Financial Accounting Standards Board (FASB) or the Government Accounting Standards Board (GASB), hospitals may face potentially significant changes in pension accounting requirements, which would affect their statement of operations and increase the time, effort, and cost to comply with periodic financial reporting requirements.