Answer:

estimates that are used in determining whether underfunding has occurred or not

1) The e companies’ retirement plan has more liability then its assets we could say that it is underfunded

2) money needed to cover current and future retirements is not readily available so that plan is said to be underfunded

3) in this situation there is no assurance that future retirees will receive the pensions they were promised or that current retirees will continue to get their previously established distribution amount

In short we could say that underfunding is when,

 Plans assets < Project benefit Obligation

you believe that current disclosure requirements for pension accounting are adequate? Why or why not?

In general we could say that current disclosure requirements for pension accounting are adequate. Because as per current requirement as per GAAP firms should recognize the future cost of retirement benefits as an expense during employees’ working years to match the expenses for retirement benefits with the revenues generated by employees’ services. It is long term liability and its calculation and the accounting is complicated and the footnotes are often torturous in length

We can derive the fund status as follow

Funded Status = Plan Assets – Projected Benefit Obligation (PBO)
A pension plan has two main elements:

The future liabilities, or benefit obligations, created by employee service.

The pension fund, or plan assets, that are used to pay for retiree benefits.

Pension fund must match the application of accrual Accounting it means actual cash flows are not counted each year. But, the computation of the annual pension expense is based on rules that attempt to capture changing assumptions about the future.