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Construction Insights: Paying Benefits to a Union? New Disclosure Requirements for Multiemployer Pension Plans Apply


Synopsis:
The Financial Accounting Standards Board (FASB) has issued a new reporting standard for companies that participate in multiemployer pension plans. These requirements significantly expand the information required to be disclosed and became effective for non-public companies for fiscal years ending after December 15, 2012.

Suggested Action:
Required information can be obtained directly from each employer’s respective union. If your organization has not already received this information, it is important to reach out to your respective union as soon as possible.

Issue:
The new information reporting requirements contain specific items of required information where some disclosure requirements pertain to each period that an income statement is presented while others pertain to the most current period presented. While other disclosures may be necessary, for each multiemployer pension plan in which an employer participates, companies must now provide information1 which includes the following:

  1. The legal name of the plan;
  2. The plan’s Employer Identification Number and Plan Number;
  3. The plan’s certified “zone status,” defined by the Pension Protection Act of 2006 (Green, for plans at least 80 percent funded; Yellow, for plans funded between 65 and 80 percent; and Red, for plans less than 65 percent funded);
  4. If the plan is coded Yellow or Red, whether or not a remediation plan (a “Financial Improvement Plan” for Yellow and a “Rehabilitation Plan” for Red) is pending or has been implemented;
  5. The contribution made by the employer to the plan for each year presented in the statements;
  6. Whether or not the employer paid a surcharge; 
  7. The expiration dates of the collective bargaining agreements instituting the plan;
  8. Whether or not the contribution from that employer represents more than 5 percent of the total contribution to the plan as of the most recent available annual report; and
  9. A description of any minimum contributions required for future periods by collective bargaining agreements, statutory obligations, or other contractual obligations, if applicable.


While CohnReznick may collect information from unions and compare it against information provided by clients, it is important that contractors reach out to their unions to obtain the information required in order to fulfill timely filing.

Contact:
For more information, please visit CohnReznick’s Construction Industry webpage and contact:

Jack Callahan, Partner and Construction Industry Practice Leader, at 732-380-8685;
Anthony J. Campolo, Partner, at 914-922-2126; or
Stephen J. Harrison, Partner, at 914-922-2107.

 



1Please note that these are general requirements – please refer to ASC 715-80-50 of the FASB’s codification for further information regarding your specific circumstances.

Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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