FASBís Approval of New Multiemployer Plan Disclosure Standard Represents Victory for AGC
The Financial Accounting Standards Board (FASB) on July 27 announced its approval of a new financial disclosure standard for employers with multi-employer pension plans. AGC is very proud of the successful, painstaking efforts by our Tax and Fiscal Affairs Committee and our Construction Industry FASB Coalition in getting the most dangerous provisions of the originally proposed standard removed, including disclosures about withdrawal liability and retiree health and welfare benefits (though the latter might be addressed in a future initiative).
The new disclosures will 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 collective bargaining agreement(s) and any minimum funding arrangements.
- The most recent certified funded status of the plan, as determined by the plan’s “zone status” under the Pension Protection Act of 2006. If the “zone status” is not available, an employer will be required to disclose whether the plan is:
- Less than 65 percent funded;
- Between 65 percent and 80 percent funded; or
- Greater than 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.
FASB expects that the revisions will be finalized in September. For public entities, the enhanced disclosures will be required in fiscal years ending after December 15, 2011. For nonpublic entities, the enhanced disclosures will be required in fiscal years ending after December 15, 2012.
For background information on this issue, including AGC’s involvement, click here, here, here, and here.
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