FASB Standard Broadens Disclosures on Multiemployer Pensions


FASB issued Accounting Standards Update no. 2011-09, Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer Plan. The ASU requires employers to provide more information about their 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. FASB announced that it had finalized the new standard in July (see previous JofA coverage, “FASB Expands Employer Disclosures for Multiemployer Pension Plans”).

The new disclosures include:

  • The amount of employer contributions made to each significant plan and to all plans in the aggregate.
  • An indication of whether the employer’s contributions represent more than 5% of total contributions to the plan.
  • An indication of which plans, if any, are subject to a funding improvement plan.
  • The expiration date(s) of the collective bargaining agreement(s) and any minimum funding arrangements.
  • The most recent certified funded status of the plan, as determined by the plan’s so-called “zone status,” which is required by the Pension Protection Act of 2006. If the “zone status” is unavailable, an employer will be required to disclose whether the plan is:
    • Less than 65% funded.
    • Between 65% and 80% funded.
    • At least 80% funded.
  • A description of the nature and effect of any changes affecting comparability for each period in which a statement of income is presented.


Prior to the issuance of this ASU, employers were required to disclose only their total contributions to all multiemployer plans in which they participate.

For public entities, the enhanced disclosures will be required for fiscal years ending after Dec. 15, 2011. For nonpublic entities, the enhanced disclosures will be required for fiscal years ending after Dec. 15, 2012. Early application will be permitted.

The September 2011 FASB in Focus provides an overview of the main provisions in the ASU.

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