FASB Delays Effective Date of Multiemployer Plan Disclosure Rules

November 11, 2010 (PLANSPONSOR.com) – The Financial Accounting Standards Board has decided that proposed disclosures for employers participating in a multiemployer plan will not be effective in 2010.

In a summary of its November 10 Board Meeting, the FASB said it will decide on an effective date at a future meeting, after it has substantially concluded its redeliberations. The September 2010 Exposure Draft, Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosure about an Employer’s Participation in a Multiemployer Plan, had proposed that public entities would begin providing enhanced disclosures in financial statements for fiscal years ending after December 15, 2010, with a one-year deferral for nonpublic entities (see FASB Issues Proposed Accounting Standards Update for Multiemployer Plans).  

Current U.S. Generally Accepted Accounting Principles (GAAP) requires employers to disclose their total contribution to multiemployer plans, but there is no requirement to describe the funding status of these plans. Under the proposed guidance, employers would have to provide more information, including a description of the plans in which the employer is involved, the employer’s contractual commitments to the plans, and the expected impact of participating in the plans on the employer’s future cash flows (including the potential impact of plan withdrawal obligations).  

The FASB’s Summary of Board Decisions is here.