Which statement is true regarding GAAP and pension plans?

The correct statement regarding GAAP and pension plans is that GAAP requires the use of a separate trust fund for each individual pension plan. This requirement stems from the need to ensure that pension benefits are funded and managed in a way that is transparent and accountable. By establishing separate trust funds for each plan, organizations can effectively segregate the pension assets and liabilities associated with each plan, allowing for precise tracking of funding ratios, investment performance, and the obligations owed to plan participants.

This approach not only enhances financial reporting and compliance but also protects the assets meant for pension payouts from being co-mingled with other organizational funds. As a result, this safeguards employee benefits and provides clarity in reporting for stakeholders, including employees, auditor reviewers, and regulators.

In the context of the other options, the idea that separate trust funds aren't required, that a single trust fund should be used for all plans, or that the practice is merely recommended but not enforced does not align with GAAP's commitment to transparency and accountability in pension management. Thus, the requirement for separate trust funds is a fundamental principle within the GAAP framework for pension accounting.