The Financial Accounting Standards Board (FASB) issued mandatory disclosure requirements for employers participating in multi-employer pension plans in September of 2011. These disclosure requirements were added to address concerns that insufficient data was available for users of the financial statements to evaluate the commitments and risks involved with multiemployer plans. These requirements are effective for privately held companies with fiscal years ending after December 15, 2012. The amendments are to be applied retrospectively for all periods presented in the financial statements.
The main provisions of the FASB disclosure requirements include identification of the following:
- The significant multiemployer plans in which an employer participates, including the plan names and identifying number;
- The level of an employer’s participation in the significant multiemployer plans, including the employer’s contributions made to the plans and an indication of whether the employer’s contributions represent more than 5% of the total contributions made to the plan by all contributing employers;
- The financial health of the significant multiemployer plans, including an indication of the funded status, whether funding improvement plans are pending or implemented, and whether the plan has imposed surcharges on the contributions to the plan; and
- The nature of the employer commitments to the plan, including when the collective-bargaining agreements that require contributions to the significant plans are set to expire and whether those agreements require minimum contributions to be made to the plans.
For the specific disclosure requirements required for employers with multiemployer pension plans refer to the FASB Accounting Standards Update No. 2011-09, Disclosures about an Employer’s Participation in a Multiemployer Plan.
We are happy to provide further information relating to the required disclosures for employers with multiemployer pension plans. For more information, contact Mark Guillaume, Manager, Kreischer Miller Construction Industry Team at Email or 215-441-4600.
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