The CIFC worked on a year-long collaboration with the Financial Accounting Standards Board (FASB) toward approval of a final multiemployer pension plan disclosure rule that removed unintended detrimental aspects of the original and subsequent proposed disclosures. Those requirements would have presented severe financial, competitive, and market risks to MCAA’s members, all of whom contribute to multiemployer plans.

McNerney said, “The outcome is a highly positive one that serves FASB’s objective of enhancing disclosures and transparency about such plans, but does so in a way that also protects our industry from serious negative collateral consequences that were posed in the original FASB proposal.”

More than a year ago, McNerney, Lake, and others met with FASB to clarify the industry position. The original FASB proposal would have required pension plans to go to great expense to disclose misleading information about withdrawal liability from multiemployer plans, information about retiree health benefits that are not vested, and various other financial disclosures that would have been an extreme burden on contracting firms and would not have been as factually representative to meet the request of FASB.

The annual disclosure of an employer’s potential withdrawal liability in every plan in which it participates, regardless of any actual withdrawal that would incur payment, was perhaps the most burdensome aspect of the initial FASB proposal. The fact that contractors may work in multiple states and contribute to multiple plans that are subject to ongoing changes due to normal investment management strategies, made the disclosure requirement extremely difficult to manage.

Then MCAA President Mark Rogers said, “If any member firm ever wondered about the return on their MCAA dues investment, they only need to consider the value to their competitiveness and bottom line of our successful advocacy efforts on this incredibly important issue.”

The MCAA is comprised of approximately 2,500 firms involved in the heating, air conditioning, refrigeration, plumbing, piping, and mechanical service industry. Whether MCAA members or not, thousands of contracting firms benefitted because of the coalition. Five members of the Construction Industry FASB Coalition are commended for their leadership and diligent efforts on behalf of the industry.

SIDEBAR: 2011 NEWSmaker

Name: MCAA/Construction Industry FASB Coalition

Association: Mechanical Contractors Association of America (MCAA)

Location: Rockville, Md.

Notable quote: “The outcome is a highly positive one that serves FASB’s objective of enhancing disclosures and transparency
about such plans.”

Publication date: 12/19/2011