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Multiple-employer plans are defined under ASC 715 as aggregations of single-employer plans (other than plans adopted by employers under common control) that are combined to permit participating employers to pool pension fund assets for investment purposes and reduce plan administration costs. These arrangements may allow employers to have different benefit formulas, with each employer's contribution to the plan based on the benefit formula it selects. Typically, multiple-employer plans do not involve collective bargaining agreements. Such plans are considered to be single-employer plans, and each employer is to account for its respective interest in the pooled assets and record pension costs in accordance with ASC 715-30. Some plans that are called multiple-employer plans under ERISA may in certain cases be multiemployer plans for accounting purposes under ASC 715-80. Careful consideration of the substance of the arrangement is necessary to distinguish between a multiemployer plan and a multiple-employer plan for accounting purposes.
Question PEB 5-2 addresses the distinguishing characteristics of multiemployer versus multiple-employer plans.
Question PEB 5-2
What are the key differences between multiemployer and multiple-employer plans?
PwC response
A key characteristic of multiple-employer plans is that the assets are not commingled, and can only be used to pay benefits for the contributing employer. They may involve features that allow participating employers to select different benefit formulas, with each employer’s contributions to the plan based on their respective benefit formula and beneficiaries. The main purpose of multiple-employer plans is to reduce the cost of plan administration by pooling together the plan assets of multiple employers.
As described in ASC 715-80, a multiemployer plan is a postretirement benefit plan in which two or more employers contribute to a fund. This fund is then used to provide benefits to plan participants who were employed by the participating employers. A common characteristic of this type of plan is that the contributions of one employer can be utilized to provide benefits to another employer’s employees (i.e., contributed assets from each employer are commingled, not kept separate, and are not restricted to provide benefits only to employees of that employer).

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