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FASB Moves Forward With Multiemployer Plan Project

Published on: 10 Mar 2011

At its March 9 meeting, the FASB staff discussed the comment letter responses to its September 2010 exposure draft (ED) Disclosure About an Employer’s Participation in a Multiemployer Plan. Respondents generally supported the need for greater transparency in multiemployer plan reporting; however, they believed that the ED’s proposed disclosure requirements were too extensive. In addition, many respondents contended that the use of a withdrawal liability as a proxy for an employer’s share of the unfunded pension liability was inappropriate. Public entities generally responded similarly to nonpublic entities.

The staff plans to continue the project and does not see a need to revisit the project’s objective, which is to enhance transparency of disclosures about the (1) plans in which an employer participates, including the financial status of those plans; (2) degree of participation; and (3) potential effect on an employer’s cash flows. The staff plans to continue reaching out to both users and preparers to further understand the cost-benefit concerns discussed in the comment letters. In addition, the staff plans to analyze the results of field-testing both the proposed disclosures and alternatives.

The staff believes that it will need to hold at least two more meetings to address (1) the quantitative aspects of the proposed disclosures and results of field-testing and (2) the qualitative aspects and overall disclosure approach. A third meeting may be held to further discuss cost-benefit issues. The FASB staff plans to continue to monitor the IASB’s multiemployer project but does not expect it to significantly affect the FASB’s plan and timing. The Board still plans to issue a final standard by the end of the second quarter of 2011.

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