GASB Approves Statements on OPEB Reporting, Pensions

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WASHINGTON - The Governmental Accounting Standards Board on Tuesday approved two statements that provide new accounting and financial reporting standards for other post-employment benefits than pensions.

The OPEB standards mirror the GASB's standards for pensions that were issued in 2012. Under one of the new statements, governments would be required to report an OPEB liability on the face of their financial statements.

"These OPEB standards usher in the same fundamental improvements in accounting and financial reporting that were previously introduced for pensions," GASB Chairman David Vaudt said in a release. "Because OPEB promises represent a very significant liability for many state and local governments, it is critical that taxpayers, policymakers, bond analysts, and others are equipped with enhanced information, which will enable them to better assess the related financial obligations and annual costs of providing OPEB."

GASB Statement No. 74 addresses reporting by OPEB plans that administer the benefits on behalf of the governments, and will be effective for financial statements for periods beginning after June 15, 2016.

GASB Statement No. 75 addresses reporting by governments that provide OPEB to their employees and those that finance benefits for employees of other governments. It will be effective for fiscal years beginning after June 15, 2017.

The statements will be available for downloading from GASB's website in late June, the group said.

OPEB primarily consist of retiree health insurance. Under the new statement for governments, those who are responsible just for OPEB liabilities associated with their own employees and whose defined-benefit OPEB plans are administered through trusts meeting certain criteria would report their net OPEB liability, or the difference between the total liability and the net position accumulated in the trust.

Governments that participate in cost-sharing OPEB plans administered by a trust that meets the criteria would report a figure that is their proportionate share of the collective OPEB liability for all governments participating in the plan. Other governments would report their total OPEB liability, GASB said.

Both of GASB's OPEB statements for governments and for plans require more extensive note disclosures and supplementary information about their liabilities, the group said.

GASB also approved Statement 73, which is about accounting and financial reporting for pensions that are not administered through trusts meeting certain criteria, and thus are not covered by board statements issued in 2012. The pension-reporting requirements in this statement are similar to those in the statement issued in 2012 for governments, GASB said.

Some of the new pension statement's provisions will be effective for fiscal years beginning after June 15, 2015, and other provisions will be effective for financial statements for periods starting after June 15, 2016, GASB said.

GASB released drafts of the statements last year. The group's standards are not binding, but state and local governments have to follow them to get clean audit opinions.

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