Labor Department Announces Decision On Sop 92-6 Non-Enforcement Policy For Multiemployer Welfare Plans

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor today announced it will not adopt a proposed non- enforcement policy affecting annual reports (Form 5500s) filed by multiemployer welfare benefit plans.

Under this proposed policy, these Form 5500s would not be rejected solely because the accountant’s opinion accompanying them was “qualified” or “adverse” due to a failure to comply with the financial statement disclosure requirements of the American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 92-6.

The department sought public comment on its proposed non-enforcement policy in a Federal Register notice published on March 13, 1997. In today’s announcement, being published as a notice in the Federal Register, the department concluded that the accounting profession should be responsible for addressing problems relating to the application of accounting principles rather than the department through its reporting enforcement policies.

In announcing its decision, the department acknowledged that the questions raised by the multiemployer plan community relating to the usefulness of the post-retirement benefit disclosures required under SOP 92-6 have merit. In the notice, the department encouraged the AICPA, as well as the Financial Accounting Standards Board, to continue to work with the multiemployer plan community and other interested parties to develop accounting methodologies for assessing post-retirement benefit obligations to produce useful and meaningful financial information for plan fiduciaries, plan participants and beneficiaries and the Department of Labor.

To ensure multiemployer welfare plans have an adequate opportunity to prepare their financial recordkeeping and other related systems to comply with SOP 92-6, the department also stated that these plans may continue to rely on its previously-announced interim non-enforcement relief for their 1999 Form 5500 reports. Plan administrators who rely on the interim relief must, however, comply with the AICPA’s pre-SOP 92-6 requirements in their financial statement treatment of the matters now covered by SOP 92-6.

Annual reports of multiemployer welfare benefit plans filed for plan years commencing on or after January 1, 2000, will be subject to rejection if there is any material qualification in the accountant’s opinion accompanying the annual report due to a failure to comply with the requirements of SOP 92-6.

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7755.

Archived News Release — Caution: Information may be out of date.

Contact Name: SHARON MORRISSEY
Phone Number: 202.219.8922