How can employers and administrators of multi-employer plans prepare for international accounting standards?
First, they need to review their plan documents, trust agreements, collective bargaining agreements and employee communications to determine the substantive plan. It is always best that all these sources agree, however the accountants give a great deal of credence to what has been promised and what was been done in the past . Even if the actual plan documentation is less generous than what has been promised or actually done in the past, the accountants will require the more generous plan or the “substantive plan” to be valued. (The most famous example of Ontario MEPP employers receiving a pension shock is the case involving the Participating Co-Ops MEPP. When the plan was wound up the employers were surprised to find that the Trustees could not decrease benefits, and as a result the regulator expected the employers to fund the deficit. This was the result of the wording in the plan text.) Second, the employers need to decide if their future contributions will be influenced by the plan’
