FASB removes withdrawal liability from requested disclosures
The Financial Accounting Standards Board (FASB) met June 29 and held the second-to-last vote on its multiemployer benefit plan disclosure proposals which had threatened all union construction firms since it was originally proposed in the fall of 2010.
The efforts made by the Construction Industry FASB Coalition (CIFC), of which TAUC is an active member, seem to have paid off.
At Wednesday's meeting, FASB reconfirmed its prior decision that it will not require employers participating in multiemployer defined contribution pension plans to disclose estimates of their potential withdrawal liabilities in their annual audited financial statements. Also, contributing employers would not be required to disclose known trends in future contributions, estimated amounts of future contributions, or the percentage of its employees covered by multiemployer plans.
Alternately, FASB has opted to move forward with the disclosures that were supported by the CIFC, and others within the Surety and Banking industries. Under the CIFC alternative, employers would be required only to disclose publicly available information, including (but not necessarily limited to):
- The employer's list of its participating pension plans,
- The current amount of those contributions, and
- The plan's most recent certified zone status, as required by the Pension Protection Act of 2006. (This law requires plans to certify funded status on an annual basis in one of three main categorization zones ? (1) the green/healthy zone for plans with funding levels of 80% or more, (2) the yellow/endangered zone for plans with funding levels between 65% and 79%, and (3) the red/critical zone for plans with funding levels below 65% and projected funding deficiencies.)
FASB will hold its final meeting concerning multiemployer benefit plans and vote on its new accounting standard in late July. The resulting standard is likely to be published this year, but it is not yet clear whether it will take effect for 2011 year-end financial statements for calendar-year companies or be delayed until 2012.