# ASC 715-60-05: Compensation—Retirement Benefits — Defined Benefit Plans—Other Postretirement — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/715/60/#05-overview-and-background) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:a91e1825dbdf7d9c1e7305199b6800dbb19c94978d8d29e946c5db29a0297767 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/60/#05-overview-and-background) SEC content: no ##### [715-60-05-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:77e5729223c874c0362bb42205a0a1d64ef09c9a7905c2a0e56cb54334d30d7e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides accounting and reporting guidance for other [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits."). The guidance in this Subtopic is presented in the following four Subsections: 1. a General 2. b Medicare Prescription Drug, Improvement, and Modernization Act 3. c Settlements, Curtailments, and Certain Termination Benefits 4. d Split-Dollar Life Insurance Arrangements. ##### [715-60-05-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:a110b3a840b6ed6a849af5d73281a97edbff104b28db3d3bbe0f2d9187a243e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance on an employer's accounting and reporting for a [defined benefit postretirement benefit plan](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)"), that is, a [single-employer plan](https://asc.understandingaccounting.org/glossary/s/#single-employer-plan "A pension plan or other postretirement benefit plan that is maintained by one employer. The term also may be used to describe a plan that is maintained by related parties such as a parent and its subsidiaries.") that defines the nonpension [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") to be provided to [retirees](https://asc.understandingaccounting.org/glossary/r/#retirees "Collectively, that group of plan participants that includes retired employees, their beneficiaries, and covered dependents."). This Subtopic refers to these [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") as postretirement benefits and to these [plans](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") as postretirement plans. Generally, the amount of those benefits depends on the [benefit formula](https://asc.understandingaccounting.org/glossary/b/#benefit-formula "The basis for determining benefits to which participants may be entitled under a postretirement benefit plan. A plan's benefit formula specifies the years of service to be rendered, age to be attained while in service, or a combination of both that must be met for an employee to be eligible to receive benefits under the plan. A plan's benefit formula may also define the beginning of the credited service period and the benefits earned for specific periods of service.") (which may include factors such as the number of years of service rendered or the employee's compensation before retirement or termination), the longevity of the retiree and any beneficiaries and covered dependents, and the incidence of events requiring benefit payments (for example, illnesses affecting the amount of health care required). ##### [715-60-05-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:b296e8e777f49b3046b764b0e34948c86403a4868a7705a9eb8e95250a3e127d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-60-05-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:f7be325ac5ab6942b6229056ec0621a721895bfaeedaa4ef07f62ee80875ab17 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-60-05-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:c998c51e1adbfcbdfbcb3844b1cffef16df66bd8030e3a09c45b290abbc8d4e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-60-05-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:0f4f057f992c82780e20d72ce67e143e17f43ac9690d240af1663100eaa981ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although this Subtopic applies to all defined benefit postretirement plans other than pensions, [postretirement health care benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-health-care-benefits "A form of postretirement benefit provided by an employer to retirees for defined health care services or coverage of defined health care costs, such as hospital and medical coverage, dental benefits, and eye care.") are likely to be the most significant in terms of cost and prevalence, and certain of the issues that arise in measuring those benefits are unique. ##### [715-60-05-7](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:021897631ff342fa9e28a8330e9e4824494501db79e6689d48b2fc4cee7eef5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many of the provisions in this Subtopic are the same as or similar to the provisions of Subtopic 715-30. Consequently, the guidance provided in that Subtopic may be useful in understanding and implementing many of the provisions of this Subtopic. However, there are differences between the specific requirements of this Subtopic and that Subtopic, and therefore the specific guidance in one Subtopic should not be used to override guidance of the other. ### Medicare Prescription Drug, Improvement, and Modernization Act ##### [715-60-05-8](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:ea750dc6c0222dd37ff35c50a44deeaa5edf34fc02f003c0d314b9290098136d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Medicare Prescription Drug, Improvement, and Modernization Act Subsections provide guidance on the accounting for the effects of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 for employers that sponsor postretirement health care plans that provide prescription drug [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment."). ##### [715-60-05-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:750bb719b6741cbf722e2978de2a16c8413152b51be2cdc5ce6c488e173b4f74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-60-05-10](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:495521e250cf949aca87990bb9db12e7cd072ed0b188eced7ffd297521af1b30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-60-05-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:7b72f36514889c1230e8369370af35983454266a9ed2d2a0f0b55a086e254e35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Medicare Prescription Drug, Improvement, and Modernization Act Subsections make reference to various provisions of the Act and, in many cases, paraphrase those provisions. However, nothing in these Subsections should be considered a definitive interpretation of any provision of the Act for any purpose. ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-60-05-12](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:d5d9b156c2ddfde0b1d55e2c12fbe2002590df0f0029fff5a6e915013ee235c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Certain Termination Benefits Subsections provide guidance on an employer's accounting for [settlement](https://asc.understandingaccounting.org/glossary/s/#settlement-of-a-pension-or-postretirement-benefit-obligation "A transaction that is an irrevocable action, relieves the employer (or the plan) of primary responsibility for a pension or postretirement benefit obligation, and eliminates significant risks related to the obligation and the assets used to effect the settlement.") of defined benefit postretirement obligations, for [curtailment of a defined benefit postretirement plan](https://asc.understandingaccounting.org/glossary/c/#curtailment-of-a-postretirement-benefit-plan "An event that significantly reduces the expected years of future service of active plan participants or eliminates the accrual of defined benefits for some or all of the future services of a significant number of active plan participants."), and for [termination benefits](https://asc.understandingaccounting.org/glossary/t/#termination-benefits "Benefits provided by an employer to employees in connection with their termination of employment. They may be either special termination benefits offered only for a short period of time or contractual benefits required by the terms of a plan only if a specified event, such as a plant closing, occurs."). ### Split-Dollar Life Insurance Arrangements ##### [715-60-05-13](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:df4a688211f1a42cb322c71a06df9c8799b6fe8ddedcc17c94595aa2d75e0ad1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Split-Dollar Life Insurance Arrangements Subsections provide guidance on accounting and reporting for split-dollar life insurance arrangements. ##### [715-60-05-14](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:1604f3f6dc986967a08b59d13b251d5a2b1a192980267976c807b48104395467 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities purchase life insurance for various reasons that may include protecting against the loss of key employees, funding deferred compensation and postretirement benefit obligations, and providing an investment return. One form of this insurance is split-dollar life insurance. The structure of split-dollar life insurance arrangements can be complex and varied. ##### [715-60-05-15](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:9b58a8762b9cb8c73c8873152f3e97b6edfcbbfbfd0e8404d4eb33e338b4a79f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The two most common types of arrangements are [endorsement split-dollar life insurance](https://asc.understandingaccounting.org/glossary/e/#endorsement-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the entity owns and controls the insurance policy. The employer enters into a separate agreement that splits the policy benefits between the employer and the employee. The employer owns the policy, controls all rights of ownership, and may terminate the insurance policy (and, in turn, the policy benefits promised to the employee). To effect the split-dollar arrangement, the employer endorses a portion of the death benefits to the employee (the employee designates a beneficiary for this portion of the death benefits). Upon the death of the employee, the employee's beneficiary typically receives the designated portion of the death benefits directly from the insurance entity and the employer receives the remainder of the death benefits.") arrangements and [collateral assignment split-dollar life insurance](https://asc.understandingaccounting.org/glossary/c/#collateral-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the employee (or the employee's estate or a trust controlled by the employee, referred to as the employee) owns and controls the insurance policy.") arrangements. Generally, the difference between these arrangements is dependent on the ownership and control of the life insurance policy.