General Motors opposes pension disclosure changes

NEW YORK, June 27 (Reuters) - General Motors Corp. , struggling with its underfunded U.S. pension plan, said on Friday it opposed an accounting rule currently being developed to improve disclosure on corporate pension plans.

The Financial Accounting Standards Board, which sets accounting rules in the United States, agreed earlier this week that companies must immediately disclose to investors if they plan to change the amount of money they pump into their pension plans, a spokeswoman said.

Companies must also report pension costs on a quarterly basis, instead of just in the annual report. Pension costs presented in the income statement must also be presented on a quarterly basis.

"General Motors feels that the current pension disclosure requirements are adequate," spokeswoman Toni Simonetti said. "The proposed new rule assumes you have one defined-benefit plan. If you're a multinational and you have several plans, it's virtually impossible to comply with the (new) rule."

GM, whose pension plan was underfunded by about $19.3 billion at the end of last year, plans to use almost all the proceeds from its massive $13.2 billion debt offering completed late Thursday -- part of a record $17.6 billion offering by the automaker and its finance unit -- to fund its pension and health-care benefit plans.

The tentative decisions by FASB are part of a broader rule the board is developing to improve the information available to investors on the performance of pension plans and their impact on companies.

Pension accounting rules have been criticized because they allow companies to smooth out gains and losses stemming from their pension plans over time, allowing some companies to report pension profits on their books even while their pension portfolios suffered losses. FASB has decided against overhauling pension accounting rules and is focusing on improving disclosure instead.

Corporate pension plans have drawn attention recently as falling stock prices and declining interest rates have hurt portfolio returns at many major companies.

According to a study released earlier this month by consulting firm FTI Consulting, companies in the Standard & Poor's 500 stock index will be forced to pump more than $35 billion into their pension plans over the next 16 months.