EBSA issues comment letter on FASB proposal to defer certain disclosures for nonpublic employee benefit plans

The Employee Benefits Security Administration (EBSA) has posted a comment letter on its website in response to a proposal made by the Financial Standards Accounting Board (FASB) in April 2013 to defer indefinitely the effective date for certain disclosures about investments held by a nonpublic employee benefit plan in the plan sponsor’s own equity securities (See Fair Value Measurement (Topic 820): Deferral of the Effective Date of Certain Disclosures for Nonpublic Employee Benefit Plans in Update No. 2011-04).

In the comment letter, EBSA Assistant Secretary Phyllis Borzi said that, in the DOL’s view, the required valuation information regarding private company stock held by employee benefit plans is highly relevant to plan participants and regulators who are the primary users of the plan financial statements. “The deferral of the disclosure requirements would deprive the plan’s participants and beneficiaries of important information directly linked to the value of the stock of their private company sponsors,” said Borzi. The financial disclosures currently required in Accounting Standards Update “are also useful to EBSA in its role of overseeing and protecting participants and beneficiaries from fiduciary abuses, especially as they relate to ESOPs where the value of the plan’s investment is often based solely on an appraiser’s subjective judgment about the value of the private company employer,” Borzi added.

Source: EBSA Comment Letter, May 30, 2013.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

Visit our News Library to read more news stories.