In the Fall 2010 issue of Legacy Advisor, we described a proposed Accounting Standards Update, Disclosure about an Employer's Participation in a Multiemployer Plan, in which the Financial Accounting Standards Board (FASB) is recommending enhanced disclosures in employer financial statements for fiscal years ending after December 15, 2010, with a one-year deferral for nonpublic entities. Legacy joined over 300 entities in submitting comment letters, expressing our concerns about the proposed disclosures. Respondents were mainly concerned with the disclosure of a withdrawal liability amount, the costs to implement the standard, and the sheer volume of disclosures. FASB decided at its meeting on November 10, 2010 that a final standard will not be effective for the 2010 calendar year-end reporting period.
Most recently, FASB met on March 9, 2011 to discuss issues relating to the development of a final accounting standard addressing disclosures about an employer's participation in a multiemployer plan. Comment letters were summarized by FASB staff, and Legacy Professionals LLP was twice quoted in the comment summary. At this meeting, the Board directed its staff to continue to work with interested parties as it refines its disclosure recommendations. While at the AICPA Employee Benefit Conference in May 2011, Legacy Partner Eileen Brassil spoke with William Hildebrand, FASB's project manager for this particular standard.
While Mr. Hildebrand's views do not represent the official positions of FASB, he did indicate that the FASB staff was looking into alternatives to the withdrawal liability disclosure, ones that would be able to be produced in a more relevant and cost-effective manner, and developed within the existing infrastructure of the plan and the employer. Mr. Hildebrand also indicated that, while the FASB staff is initially focusing on developing disclosure recommendations with regard to an employer's participation in multiemployer pension plans, it is "putting to the side" disclosure recommendations for an employer's participation in multiemployer plans offering other postemployment benefits, such as health and welfare plans. However, disclosures about these benefits may be a part of the final standard.
We will continue to monitor this important topic and are available to discuss your questions.