MEDIA ADVISORY 09/21/11

FASB Issues Accounting Standards Update to Improve Employer Disclosures for Multiemployer Pension Plans

Norwalk, CT, September 21, 2011—The Financial Accounting Standards Board (FASB) today issued Accounting Standards Update No. 2011-09, Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer Plan. The Update 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 in July, 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:

    • Less than 65 percent funded
       
    • Between 65 percent and 80 percent funded
       
    • 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.


About the Financial Accounting Standards Board


Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.