At its November meeting, the Financial Accounting Standards Board (FASB) decided to delay the proposed effective date for its project on disclosures related to an employer's participation in a multi-employer plan. This proposal has received much attention from companies across all industries, as well as from auditors, actuarial firms, and other professionals given the practical issues that employers and plans would have to address in complying with the proposed requirements. The FASB staff noted several significant issues that were raised in the numerous comment letters it has received and stated that additional time would be needed to address these issues.

Background:
In September, 2010, the FASB issued an exposure draft titled, "Disclosure about an Employer's Participation in a Multi-Employer Plan," which would significantly impact the amount of information disclosed in a company's financial statements as it relates to multi-employer pension or healthcare plans. This proposal was designed to create greater transparency in financial reporting by requiring more disclosures related to such plans.

One aspect of a multi-employer plan, which includes union pension and healthcare plans, is that assets contributed by one participating company may be used to provide benefits to employees of another participating company because assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. The proposed regulations would require disclosures intended to provide information on: (a) all multi-employer plans in which the employer is involved; (b) the employer's participation in such plans; (c) as well as any effects on the employer's cash flows from its participation in such plans. While the information needed by employers to comply with the proposed regulations would have to be supplied by the plans, it is expected that the process to collect and summarize the information could be time consuming.

The board has indicated that it plans to address these issues in early 2011.