Could someone please provide a brief (I know with this topic it's not necessarily easy) description of the difference between Funding and FAS 87 and under what circumstances is a FAS 87 valuation required? Thank you!!

"Funding" typically means cash contributions, and the actuarial analysis behind them. If the plan is subject to ERISA, it also encompasses Internal Revenue Code section 412 (and now 430 and 436, etc).

"FAS87" and/or "accounting" refers to how a DB plan is incorporated into the financial statements of the plan sponsor. All FAS statements are part of generally accepted accounting principles (GAAP), and therefore apply to any company that issues GAAP financial statements. On a practical level, many privately-held companies, although technically subject to GAAP, don't bother with FAS87 information. Governmental plan sponsor are not subject to FAS accounting rules.

Another way to think about it is that "funding" defines how much cash the employer needs to deposit into the trust. The FASB report tells the employer how much he can expense for accounting purposes. The two numbers can often be VERY different.

We do FAS 87 calcs only upon request by the CPA. It's certainly not required for all DB plans, and the CPAs are in the best position to know when it's needed. Could be because GAAP is required, because their bank requires it, etc.