In 2001 , investor Warren Buffett had this to say about pension accounting:

Unfortunately, the subject of pension [return] assumptions, critically important though it is, almost never comes up in corporate board meetings. . . . And now, of course, the need for discussion is paramount because these assumptions that are being made, with all eyes looking backward at the glories of the 1990 s, are so extreme.

a. What does Mr. Buffett mean by the "pension return assumption"?

b. Why is the pension return assumption important in pension accounting in accordance with generally accepted accounting principles?

c. Why is the pension return assumption important in pension accounting in accordance with Internal Revenue rules?

d. Mr. Buffet went on to warn that too high an assumed return on pension assets risks litigation for a company's chief financial officer, its board, and its auditors. Why?