FASB Improves Employer Disclosures for Multiemployer Pension Plans
The Financial Accounting Standards Board (FASB) has approved a revised accounting standard intended 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.
“Historically, very limited information about these plans has been disclosed, even though they may represent significant potential obligations for many large, unionised industries such as trucking, supermarket chains, and construction firms,” said FASB Chairman Leslie Seidman. “The enhanced disclosures will ensure that shareholders in companies that participate in these plans, workers who depend on them for their retirement benefits, as well as lenders and others, will have more information regarding the employers’ pension commitments and the financial health of the plans.”
Prior to this action by the FASB, employers were required to disclose only their total contributions to all multiemployer plans in which they participate. These decisions conclude comprehensive deliberations about the disclosures an employer should provide. The FASB issued initial proposals for revising disclosures for public comment in September 2010.