Market-Return Cash Balance Plans (BDO Comment Letter)
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On June 10, 2026, the FASB issued an Exposure Draft proposing amendments to ASC 715-30, Compensation — Retirement Benefits — Defined Benefit Plans —Pension, to clarify the discount rate used to measure the benefit obligation for certain market-return cash balance plans. The proposed amendments would require entities to use the assumed interest crediting rate as the discount rate for qualifying plans, which would generally result in the benefit obligation approximating the plans' hypothetical account balances and reduce diversity in practice.
In its comment letter, BDO supported the Board's proposal, noting that the amendments would improve consistency in practice, enhance comparability, and better align the measurement of these obligations with the underlying economics of market-return cash balance plans. BDO also supported the Board's decision to maintain a narrow scope for the project and encouraged continued monitoring of practice to determine whether similar issues arise in other plan types that may warrant future consideration.