Wharton Pension Research Council Working Papers

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Working Paper

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This chapter explores a number of aspects of mark-to-market (MTM) accounting, to better understand the effects of a change in accounting method. Corporate plan sponsors have an ongoing management challenge with defined benefit (DB) pensions. Among the many issues is how to properly account for their associated assets and liabilities, and to provide clarity regarding the plan itself while not diluting transparency into the underlying business performance of the corporate plan sponsors. Traditional generally accepted accounting principles (GAAP) for pensions is an overly complex mechanism, attempting to balance these two often conflicting goals. There is an alternative approach: MTM accounting.


The published version of this Working Paper may be found in the 2016 publication: Retirement System Risk Management.


Defined benefit pensions, generally accepted accounting principles (GAAP), mark-to-market accounting (MTM), pension volatility, plan sponsor, risk party portfolio

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Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2015 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.



Date Posted: 12 March 2019