GFOA Panels Working on Pension Best Practice Paper

The Government Finance Officers Association moved closer to issuing a new best practice paper on pension issues following recent changes in the Governmental Accounting Standards Board's financial reporting standards.

The GASB changes include new ways for state and local governments to report pension liabilities and expenses.

On Saturday, the GFOA's committee on retirement and benefits administration, or CORBA, approved a new best practice on core elements of a pension funding policy, which addresses an area that was not included in the new GASB standards.

"The new GASB standards are silent on funding," said Rich Harris, vice chair of CORBA. "There is a gap created by the standards and our work is focused on helping members fill that void and continue to ensure long-term sustainability of public sector pension plans."

Harris is also the finance and compliance officer for the Denver Employees Retirement Plan.

The best practice recommends principles and objectives for states and local governments that offer defined benefit pensions to follow. The core elements of these principles include actuarial cost method, asset soothing method, and amortization policy.

The committee also approved a best practice on strategies for budgeting and managing health care costs, on which they have been working with GFOA's committee on governmental budgeting and fiscal policy.

The best practice provides an overview of strategies to manage and contain these costs while still promoting a healthy and skilled workforce.

The committee also discussed in detail, and is moving forward with, a draft of a best practice on actuarial audits and reviews.

CORBA is chaired by John Tuohy, deputy treasurer for accounting and treasury management in Arlington County, Va.

Best practices approved by the committee on Saturday will go to the executive board for approval in October.

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