As I discussed in “Overfunded Pension Plan Assets, an Invested Capital Adjustment”, under SFAS 158, companies are obliged to report the net funded status of their pensions, which is the difference between the fair value of their pension plan assets and the plans’ projected benefit obligation, i.e. the present value of their future pension obligations. Underfunded plans are, in effect, borrowings from employees and will require repayment at some point in the future and so, the degree of underfunding is deducted from my calculation of economic book value (EBV). Overfunded plans have dead capital that is not required to generate a return to meet projected benefit obligations and so, this is added to my calculation of EBV.