multiemployer plan

ASC 715-80 governs an employer's accounting and disclosure for participation in multiemployer pension and other postretirement benefit plans — plans to which two or more unrelated employers contribute, usually under collective-bargaining agreements. The core rule is defined-contribution-like: the employer recognizes as net pension (or net periodic postretirement benefit) cost the required contribution for the period, including cash and the fair value of noncash contributions, and recognizes a liability only for unpaid required contributions (715-80-35-1). Extensive plan-by-plan disclosures (zone status, EIN, contributions, collective-bargaining agreement expirations, withdrawal exposure) are required so users can assess the distinctive risks of multiemployer participation.

ASC 715-930 governs how coal industry entities account for postretirement medical and death benefit obligations imposed by the Coal Industry Retiree Health Benefit Act of 1992, which assigns beneficiaries (and a share of "orphan" beneficiaries) of the UMWA Combined Benefit Fund to former signatories of coal wage agreements. Entities still operating in the coal industry may elect to account for the obligation either as participation in a multiemployer plan or as a liability imposed by the Act; entities electing liability treatment, and all entities no longer operating in the coal industry, must recognize the entire obligation as a loss under Subtopic 450-20 (715-930-25-1). Losses so recognized are presented as an unusual or infrequently occurring item, and the impact of the Act must be disclosed.

ASC 965-10 is the Overall subtopic of the health and welfare benefit plan accounting Topic; it defines the scope and gives an overview of how such plans report. It applies to all entities that are defined benefit or defined contribution health and welfare benefit plans, describes how benefits may be delivered (insured contracts versus a self-funded trust such as a VEBA/501(c)(9) trust or 401(h) account), and flags that the insurance arrangement drives how assets and benefit obligations are accounted for. It also notes the ERISA reporting backdrop, including that many plans must file GAAP financial statements.