The current rule governing pension accounting standards, FAS No 87, has come under fire for some its language regarding Smoothing. Smoothing allows companies to take certain assets and obligations off balance sheets and amortize them as income or expenses over time.  Additionally, companies may be allowed to report the expected return on assets, instead of actual losses and gains.

FASB issued a memo to the Financial Accounting Standards Advisory Council (FASAC) saying, "the Board has received many (other) communications from constituents expressing their dismay with pension accounting."

Included in this memo, was part of a letter received by the FASB from US Representative Robert Matsui (D-California), in which he states the current rules "create the potential for overstatement of corporate earnings and create incentives to corporations to overinvest pension plan assets in stock."

Matsui pointed to the ability for companies to use expect returns on assets; saying it appears companies are using historically high rates of return, even when considering the recent downturn of equity and bond markets.  "I can think of no other circumstance in which corporations report earnings to shareholders based on returns that they hope to realize in the future," Matsui wrote.