One of the most important questions facing TAUC members in 2011 is whether the Financial Accounting Standards Board (FASB) will implement new financial disclosure requirements for contractors participating in multiemployer pension plans.
As part of the Construction Industry FASB Coalition (CIFC), TAUC continues on a positive course of constructive collaboration with the Financial Accounting Standards Board (FASB) to help achieve their goal of greater transparency and disclosure of multiemployer pension plan participation in audited financial statements of participating companies. The CIFC’s stated objective is to ensure FASB’s proposal does not include the severe, negative collateral consequences for construction firms and their plans that were inherent in the original FASB Exposure draft ED-715.
The coalition continues to provide in-depth and expert analysis of the many issues relating to withdrawal liability, the infeasibility of disclosures relating to retiree health coverage, and the unnecessary scope of other quantitative and qualitative disclosures FASB proposed that are inappropriate for multiemployer plans and the unique way they operate in the construction industry. The coalition is offering alternative disclosure approaches that achieve FASB’s objectives without the negative consequences inherent in ED-715 as proposed.
CIFC’s proposals have now gained the endorsement of a number of key firms and associations in the surety and commercial banking industries. These include the Key Bank in Cleveland, OH; the Amalgamated Bank of Chicago, IL; and the National Association of Surety Bond Producers. These organizations have assessed our proposed alternative disclosures and judged them appropriate for adoption by FASB, as they avoid the negative consequences the CIFC has laid out, yet still provide information and references necessary to conduct sound underwriting judgments.
The process and timeline by which FASB will re-deliberate its original proposal is still unknown at this time. The CIFC will continue to reach out to FASB with its in-depth expertise and analysis to help achieve an acceptable outcome to construction firms that participate in multiemployer pension plans. FASB hasn’t yet decided whether to re-expose another draft after its re-deliberations or publish a final standard by the end of the second quarter of this year.
The CIFC is made up of The Association of Union Constructors (TAUC), the International Council of Employers of Bricklayers and Allied Craftworkers (ICE), the National Electrical Contractors Association (NECA), the National Finishing Contractors Association (FCA), the Mechanical Contractors Association of America (MCAA), the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA), the Ironworker Management Progressive Action Cooperative Trust (IMPACT), the National Association of Construction Boilermakers (NACBE), the Associated General Contractors of America (AGC), and the National Association of Surety Bond Providers (NASBP).