The project notes that multi-employer plans involve sharing between the participants in the plan of the actuarial risks associated with their current and former employees. In other words, participation in a multi-employer plans creates different assets and liabilities for the participating employers from those that would arise for those employers if they had single entity plans.
The IFRIC proposes a requirement that, if possible, a multi-employer plan is to be measured on the basis of assumptions appropriate for the plan as a whole, rather than for a specific participating entity. The plan is then allocated, if possible, across the participants so that a participating entity recognises an asset or liability that reflects the extent to which the surplus or deficit in the plan will affect its future contributions.
Further the IFRIC requires an entity to make every practicable effort to apply defined benefit accounting to multi-employer plans in which it participates.
Subsequently, the IFRIC agreed that, in the light of the arguments put forward - in the various comment letters - about the potential lack of utility of the amounts that would be generated, it should not proceed with the project as initially drafted.
The IFRIC further considered the responses to the proposed amendments in D6 Multi-employer plans relating to state plans. The IFRIC decided not to proceed with the proposed amendments, in part because the responses indicated that some participants in such state plans were able to obtain the information necessary for defined benefit accounting and thus should do so. This means that the existing provisions of IAS 19 would continue to apply to state plans.