U.S. companies participating in multiemployer defined benefit pension and other post-retirement benefit plans would be required to disclose more information to its participants, such as funded status, under an accounting standards update proposed by FASB.
The proposal would require employers to provide a description of the plans, disclose funded status and employers’ contractual commitments to the plan, and disclose the expected impact of participating in the plans on the employers’ future cash flows.
The proposed accounting standards aim to help multiemployer plan participants better assess the potential risks faced by employers participating in the plans, according to a FASB news release.
“Investors and other financial statement users have expressed concern that current financial statements do not provide enough information about the commitments and potential risk related to multiemployer pension arrangements,” FASB member Leslie Seidman said in the news release.
If approved, public companies would have to provide the enhanced disclosures for fiscal years ending after Dec. 14, 2010. Non-public companies would have to provide the disclosures for the fiscal years beginning on or after Dec. 15, 2010.
A draft version of the proposals is available at http://www.fasb.org. FASB is accepting comments on the proposed reporting standards until Nov. 1.
FASB spokesman Neal McGarity could not immediately be reached for comment.