Emerging Task Force Discusses Potential Changes to Master Trust Reporting

In 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2015-12 “Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient,” which simplified financial reporting requirements for employee benefit plans.  On June 10, 2016, the FASB was back at it.  This time looking at reporting for master trusts.

The FASB, through the Emerging Issues Task Force (EITF), began initial deliberations on EITF Issue No. 16-B ‘Employee Benefit Plan Master Trust Reporting.’  The EITF will deliberate the following eight issues as part of Issue No. 16-B:

Issue 1 – Presentation of Master Trust Balances and Activity on the Face of the Plan’s Financial Statements

Issue 2 – Disclosure of Master Trust Financial Statements

Issue 3 – Master Trust Financial Statement Reporting

Issue 4 – Disclosure for Plans with Divided Interests

Issue 5 – Disclosure of Investment-Related Accruals

Issue 6 – Other Applicable GAAP Disclosures for Investments Held in a Master Trust

Issue 7 – Section 401(h) Account Investment Disclosures

Issue 8 – Consistency between Topics

Since many employee benefit plans hold investments in master trusts, the AICPA Employee Benefit Plan Expert Panel concluded that master trust disclosures is an area in which standard-setting action is needed.  Additionally, many preparers rely on the AICPA’s Audit and Accounting Guide, Employee Benefit Plans, to develop their master trust disclosures, as the guidance contained with generally accepted accounting principles can be limited and incomplete.

If you have any questions about financial reporting requirements for employee benefit plans, please contact Schneider Downs for assistance and visit our Employee Benefit Plan services page to learn about the services that we offer.


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