Multiemployer Pension Plan Disclosure Requirements

Since many construction companies rely on union workers, multiemployer pension plans are quite common.  These plans are designed to allow union workers to accrue pension benefits in a single pension plan for their retirement.  The plans often work quite well, but they can run into issues when they are underfunded – an increasingly common occurrence in recent years.  Because of this, the Financial Accounting Standards Board (FASB) has issued a new standard that requires additional disclosures regarding a company’s participation in multiemployer pension plans.  These changes take effect for years ending after December 15, 2012.

What You Can Expect:
Previously, companies were required to disclose their total contributions to multiemployer plans in which they participate. For years ending after December 15, 2012, employers will be required to provide additional information related to multiemployer plans in their annual financial statements including:

1.  Legal name, plan number and employer identification number of all plans in which you participate
2.  The amount of employer contributions made to each significant plan
3.  The expiration dates of collective bargaining agreements and any minimum funding arrangements
4.  The most recent funded status of the plan

Preparing for the Change:
If you are a union contractor that participates in at least one multiemployer pension plan, you will want to prepare in advance in order to comply with the new standards, and Bergan Paulsen can help you with that transition.  Your plan administrator will need to provide the required disclosure information, and it may take time to make this information available. With a little planning, we hope to make this change as smooth as possible.