How responsible are accounting boards for current pension problems?

Pension accounting rules in the US appear contrary to the FASB's usual conservatism in accounting. Consequently, accounting rules lead firms to understate pension obligations, and it requires fairly sophisticated financial statement analysis to get to the bottom of the actual pension obligations.

In addition to the current work at FASB on improving pension accounting, there appears to be a need for firms to state pension assets and liabilities on their balance sheets minus smoothing effects (this is often already in the notes) - which is really two changes - one, that pensions should not be treated off-balance sheet financing and two, pensions must be marked-to-market on balance sheets. The latter will be more aligned with the conservatism usually applied to accounting, and might allow investment management experts to continuously adapt to actual returns on pension funds.