Horizon has prepared a BULLETIN to assist employers and their accountants in complying with the FASB’s new disclosure requirements related to participation in multiemployer pension plans.
The new standard requires the following disclosures:
1. The amount of employer contributions made to each significant plan and to all plans in the aggregate.
2. An indication of whether the employer’s contributions represent more than five percent of total contributions to the plan.
3. An indication of which plans, if any, are subject to a funding improvement plan or rehabilitation plan.
4. The expiration date(s) of the collective bargaining agreement(s) and any minimum funding arrangements.
5.The most recent certified funded status of the plan, as determined by the plan’s “zone status” under the Pension Protection Act of 2006. If the “zone status” is not available, an employer will be required to disclose whether the plan is less than 65% funded, between 65% funded and 80% funded, or at least 80% funded.
The new disclosure requirements will be required for fiscal years ending after December 15, 2011 for publicly-traded companies. For non-publicly traded companies, the new disclosure requirements will be required for fiscal years ending after December 15, 2012.
The information required in the new disclosures can generally be found in the employer’s own records, notices that the multiemployer plans were required to send to the employer, and publicly available Form 5500 information filed by the plans. Therefore, complying with the new requirement will hopefully not pose a significant burden for most employers.
The above and the Horizon bulletin are not presented as specific legal or accounting advice for any particular plan, employer, or accountant.