|FASB Expands Disclosure Requirements for Multiemployer Plans|
The FASB issued Accounting Standards Update (ASU) No. 2011-09, Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer's Participation in a Multiemployer Plan. This update provides new disclosure requirements for employers that participate in multiemployer pension plans. The revised disclosures will provide users of financial statements with additional information about the plans in which an employer participates; the level of an employer’s participation in the plans; and financial health of significant plans.
A summary of the disclosures is as follows—
- Employers must disclose the plan legal name, plan employer identification number, and, if available, the plan number.
- Employers must disclose the contributions made to each significant pension plan and a total contribution figure for all plans.
- They must indicate if their payments are more than 5% of a plan's total contributions.
- They must indicate what plans, if any, are subject to a funding improvement plan.
- They must indicate if there are any plans that have programs to make up for funding shortfalls and state the expiration date of any collective bargaining agreements with employees and minimum funding arrangements.
- The employer must address a plan's funding status as defined by the Pension Protection Act of 2006. If the status is unavailable, a company will have to say whether the plan is less than 65% funded, between 65% and 80% funded, or more than 80% funded.
- Employers will also have to describe any changes in the most recent reporting period that could weaken an investor's ability to make comparisons with previous periods.
The guidance is effective for public entities for years ending after December 15, 2011 and for nonpublic entities in years ending after December 15, 2012, with early adoption permitted. Retrospective disclosures will be required.