So far, corporate pensions appear to have escaped the credit market storm that has punished commercial and investment banks and insurers. But don't be fooled. Plenty of toxic mortgage-related debt is probably there; it's just buried from investors' view.

Blame current accounting rules that only require companies to disclose the basics about their pension plans. That allows them to release the broadest of generalizations about their stock, debt and other investments, and whether those assets are enough to cover future pension obligations.

That makes for a dark corner of corporate financial statements.

The good news is that some much needed sunlight may soon arrive. The Financial Accounting Standards Board is considering a proposal that would force companies to provide more detail on how they allocate and value their pension assets.

Should that go through, it would beef up the disclosures for the nation's defined benefit plans, which give workers a company-funded monthly check when they retire. That differs from defined contribution plans, often referred to as 401(k)s which let employees direct their own investments.

How corporate pension plans fare certainly matter, since they are intended to cover 44 million American workers and retirees.

Just look at what happened earlier this decade when the dot-com stock bust caused many plans to become severely underfunded, meaning what they owed to retirees exceeded assets by at least 10 percent. That deterioration in the plans' health left many companies with surging pension costs.

Those expenses became another reason, along with the ballooning costs of running defined benefit plans, why many companies have phased out the programs for new employees.

Now there is another financial crisis to worry about that. The turbulence in both stock and bond markets could roil pension assets, but that most likely won't show up in the annual pension report cards that companies will give as part of their 10-K securities filings.

Many plans may see their pension assets rise for 2007 because record-setting financial market gains early in the year offset the late-year losses. For instance, the Standard & Poor's 500 stock index tumbled 6 percent from October through the end of December, but still finished up 3.5 percent for all of 2007

The 372 companies in the Standard & Poor's 500 stock index that offer defined benefit plans are expected to be 97 percent funded at the end of 2007, unchanged from the previous year and sharply higher than the 81 percent in funding level seen in 2002, according to Credit Suisse accounting analyst David Zion.

In addition, companies don't have to disclose their exposure to certain assets, making it almost impossible for investors to understand a plan's risk. Companies just categorize investments in basic buckets like equity, fixed income, real estate and ''other,'' which often refers to the fast-growing area of alternative investments like hedge or private-equity funds.

''For most companies, every one of those categories means different things,'' Zion said. ''With the recent turbulence in asset values, investors want more detail about the types of assets that companies hold, including assets in the pension plan.''

If the FASB gets its way, investors will soon get better insight. The U.S. accounting rule maker on Feb. 14 decided to move forward with a potential rule change that would greatly enhance the pension disclosures.

At minimum, companies would have to disclose the amount of assets allocated to equities, government bonds, corporate bonds, mortgage-backed securities, derivatives and real estate. Additional categories would be provided for concentrations of risk _ like large investment in one country or type of securities, according to Philip Hood, lead manager for the FASB on this initiative.

Companies would also have to apply new fair-value disclosures to their pension assets, just as they do to their other balance sheet items. That means companies would have to give more information on how they value their plan assets.

That's easy when there is a marketplace for similar assets, which then can be used as the basis for valuation. But when there is no market _ as we are seeing now for many mortgage-backed and other securities hardest hit by the credit crisis _ that puts much discretion in management's' hands to make their best guess of what valuations should be.

Accounting experts are cheering the changes. It would go a long way toward ''letting investors know what kind of quality a firm's pension assets possess,'' Jack Ciesielski, who writes the popular financial newsletter The Analyst's Accounting Observer, said on his blog.

The FASB wants this rule in place for companies with fiscal years ending after Dec. 15. It will solicit public comment on the changes starting next month, and then will review the proposal again.

That means investors and workers have another year to fret before they get a better view.

Source: Associated Press