The third area of concern relates to accounting rules, or perhaps more specifically, to our use of these rules. This area is becoming increasingly important to pension plan sponsors because international accounting standard setters are examining a move to unsmoothed, so-called "fair-value" methods.
These accounting rules are intended to replace rules that smooth changes in asset and liability values with rules that focus on values at a point in time. But it is not at all clear how useful or relevant it is to determine point-in-time values of assets and liabilities in a defined-benefit plan.