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OPEB Obligation Abatement

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OPEB Obligation as percentage of PBO - 2014 all (205)During 2014, obligations for other post-employment benefits (OPEB) provided by U.S. corporations continued to decline relative to projected benefit obligations (PBO) for defined benefit pension plans. Pension PBO itself is a moving target — although remeasurement at lower interest rates at the end of 2014 led to sharp increases in PBO, the aggregate global PBO continues to fade due to accrual freezes implemented by many pension plans. Even so, curtailment of retiree health benefits and other retiree benefits has been more sweeping than the pension freezes, cutting aggregate global OPEB liabilities to less than half the level measured a decade ago.

This chart shows aggregate global results for OPEB expressed as a percentage of PBO for 205 U.S. companies for fiscal years ending in 2000 through 2014. Don’t expect the current trend to ever reverse: eventually non-pension retiree obligations shouldered by employers will dwindle to little or nothing, leaving those responsibilities entirely to Medicare and the individual.

I continue to collect data from 10-k financial statements published by corporations for fiscal years ending in 2014, anticipating eventually reaching all of the more than 1,300 pension plan sponsors covered in my pension hobby’s studies. General results for specific subsets of that universe might differ from the general trends seen here. However, all larger general groups — for instance, OPEB and pension plan sponsors among the S&P 500 constituents — will be showing the general trend shown here.

Meanwhile, remember my usual general cautionary note (something that keep getting forgotten or shoved to very tiny print in footnotes in most of the industry reports on this sort of info), that these numbers include OPEB and pension funds for foreign subsidiaries for some of these employers. Which I’ll sort out in future revisions to this post.

I’ll be updating this post as I continue to collect 10-k reports, retaining earlier versions of the post in backpages, as linked in the numbers at the bottom of this post, with oldest versions carrying the higher numbered links.

(As I’ve previously disclaimed, posts such as this represent efforts of my favorite pastime. My formal work does not involve any of this, and none of it represents any position or comment that should in any way be attributed to my employer. Likewise, as always, it represents general personal impressions and should not be treated or used as formal professional advice.)

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Written by macheide

11 March 2015 at 5:04 pm

Posted in άctuary

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