On May 31, 2011, the FASB Board discussed and ultimately chose to tentatively abandon plans to require extensive disclosures for multiemployer pension plan benefit obligations. In September 2010, the Board issued an Exposure Draft of a proposed standards update titled Compensation - Retirement Benefits - Multiemployer Plans (Subtopic 715-80): Disclosure about an Employer's Participation in a Multiemployer Plan.  This proposed update would have required employers to disclose an estimated withdrawal liability for their share of any under-funded benefit obligation in that plan.  

The original proposed revision would have required cumbersome calculations and additional work when it came time to prepare audited or reviewed financial statements for a large number of companies, and in particular, for those in the construction industry.  As with many recent exposure drafts, the FASB received a slew of responses, many in opposition to their intended approach to this expanded disclosure.

We are not out of the woods yet, however.  The Board has modified its expectations but still intends to pursue a modified disclosure for multiemployer plan participants.  Among these, employers would be required to disclose the following:

• Legal name of the plan and the plan's Employer Identification Number
• The "Certified Zone Status" of the plan in accordance with the Pension Protection Act of 2006
• If no zone status is available, disclosures would be made regarding the overall funding status of the plan on a percentage basis
• If a funding improvement plan was in place or planned
• The expiration date of the plan's associated collective-bargaining agreement
• If the employer's contributions represent greater than 5% of plan contributions

If you have questions or wish to discuss how this change may affect your business, please contact Rhett Ennis at (425) 289-7628 or rennis@bpcpa.com.