The Financial Accounting Standard Board (FASB) issued an exposure draft on September 1st that calls for participants in multiemployer defined benefit plans to disclose additional details including financial exposure, withdrawal liability, and underfunding surcharges.
TAUC and its member contractors anticipate that these changes would require participants to report an enormous amount of new data in the footnotes of contractors’ financial statements, especially those who employ multiple crafts that work in a variety of jurisdictions across the United States. The administrative burdens and inconvenience associated with gathering this data would be severe to say the least.
However, an even bigger problem is that the additional data FASB wants contractors to disclose in their financial footnotes would be more than a year old by the time the statements are released, potentially creating inaccurate financial pictures for those utilizing these financial reports. These out-of-date numbers could have significant negative impacts on contractors’ ability to attain bonding. The union construction industry capacity could be severely impacted by contraction of surety and financial credit just as the market begins to recover. Thus, TAUC is advising its local employer organizations and members to contact pension fund advisors and their accountants to prepare for a response to the Exposure Draft of the new FASB standard (715-80) due November 1, 2010.
TAUC is working in a variety of ways to educate FASB on why its new proposal would create serious negative unintended consequences when applied to the unique regulatory and legislative policies currently in existence that govern construction industry multiemployer plans. FASB has already received over 300 comments on its first Exposure Draft (450) addressing withdrawal liability as a potential loss contingency. The scope, breadth and detailed analysis from those parties submitting comments on behalf of the construction industry have impressed FASB.
TAUC will continue to work with the Campaign for Quality Construction and other coalitions to prevent FASB’s proposal from being implemented in a way that would negatively impact employers that participate in multiemployer pension plans. To view the comments regarding the first exposure draft (450) that have already been submitted to FASB on behalf of TAUC and the Campaign for Quality Construction, as well as the coalition led by the Groom Law Group (of which TAUC is also a participant), click on the links below.
Questions and comments can be directed to TAUC’s Senior Director of Membership Services and Government Affairs Todd Mustard.