FASB Modifies Proposed Multiemployer Plan Participation Disclosures


At its meeting on May 31, the Financial Accounting Standards Board (FASB) tentatively agreed that it will not require employers to disclose an estimate of withdrawal liability for each material multiemployer defined benefit plan in which they participate, as it had previously proposed. According to the FASB, certain types of enhanced disclosures will still be required. However, these requirements will not be applicable until a final decision is made by the board.


As a general matter, financial statement disclosures regarding an employer’s participation in a multiemployer defined benefit plan are limited to contributions required to be made to each plan for the year. However, in the event that a withdrawal becomes either “probable” or “reasonably possible,” then the employer must report its withdrawal liability.

In September 2010, FASB issued the Exposure Draft of Proposed Accounting Standards Update, Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosure About an Employer’s Participation in a Multiemployer Plan (Exposure Draft), which would have required employers contributing to multiemployer defined benefit plans to disclose additional information about their participation in such plans, including the employer’s potential withdrawal liability, in the notes to their financial statements reported on Form 10-K. The reporting change would have required employers to report potential withdrawal liability even if an employer considered the likelihood of incurring that liability to be “remote.”

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