Sunday, December 24, 2006

Honest Accounting

Matt Miller wrote in Fortune about a way to make corporate financial results more transparent as well as erode the notion that social benefits, particularly healthcare, should be tied to employment.

Called age-based earnings, it would require companies to calculate the average age of its workforce and put the resulting health insurance and pension liabilities on their balance sheets before figuring out profits.

Some argue that would accelerate the switch to 401(k) plans from pensions. However, that notion has already achieved unstoppable momentum.

The real benefit would be a more realistic picture of a company's future. That's essential to folks who invest their retirment savings in the stock market -- which means just about everyone.