FASB Issues New Multiemployer Plan Disclosures

September 23, 2011 (PLANSPONSOR.com) – The Financial Accounting Standards Board (FASB) has issued new disclosure rules regarding employer participation in a multiemployer plan.


According to accountingeducation.com, Accounting Standards Update No. 2011-09, Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer Plan is intended to lead employers to provide more information about an employer’s financial obligations to multiemployer pension plans.

Multiemployer pension plans commonly are used by an employer to provide benefits to union employees who may work for many employers during their working life, thereby enabling them to accrue benefits in a single pension plan for their retirement.

As announced earlier this year (see FASB Changes Position on Multiemployer Plan Disclosures), the new disclosures include:

  • The amount of employer contributions made to each significant plan and to all plans in the aggregate.
  • An indication of whether the employer’s contributions represent more than five percent of total contributions to the plan.
  • An indication of which plans, if any, are subject to a funding improvement plan.
  • The expiration date(s) of the collective bargaining agreement(s) and any minimum funding arrangements.
  • The most recent certified funded status of the plan, as determined by the plan’s so-called “zone status,” which is required by the Pension Protection Act of 2006. If the “zone status” is not available, an employer will be required to disclose whether the plan is (a) less than 65 percent funded; (b) between 65 percent and 80 percent funded, or (c) at least 80 percent funded.
  • A description of the nature and effect of any changes affecting comparability for each period in which a statement of income is presented. 

Prior to the issuance of this Update, employers were required to disclose only their total contributions to all multiemployer plans in which they participate.

For public entities, the enhanced disclosures will be required for fiscal years ending after December 15, 2011. For nonpublic entities, the enhanced disclosures will be required for fiscal years ending after December 15, 2012. Early application will be permitted.

The September 2011 FASB in Focus provides an overview of the main provisions in the Update, which is available from the FASB Accounting Standards Update page, or HERE.