GASB 67/68 - Pension Accounting Changes

The Governmental Accounting Standards Board (GASB) issued three standards that will improve the accounting and financial reporting for pensions by both pension plans and participating employers:

Statement No. Statement Title Applies To Effective Date
No. 67 Financial Reporting for Pension Plans Plan financial reports Fiscal years beginning after June 15, 2013
No. 68 Accounting and Financial Reporting for Pensions Employer financial reports Fiscal years beginning after June 15, 2014
No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68 Employer financial reports Simultaneously with the provisions of Statement No. 68
No. 73 Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68 Plan and Employer financial reports Fiscal years beginning after June 15, 2015
No. 78 Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans Employer financial reports Fiscal years beginning after December 15, 2015
No. 82 Pension Issues—an amendment of GASB Statements No. 67, No. 68, and No. 73 Plan and Employer financial reports Fiscal years beginning after June 15, 2016
Implementation Guide 2017-1 Pension Issues—an amendment of GASB Statements No. 67, No. 68, and No. 73 Plan and Employer financial reports Fiscal years beginning after June 15, 2017

 

Additional Information Available on the GASB Website

The GASB provides a variety of resources designed to support the understanding of these Statements:

The primary change is that accounting for pensions will no longer be based on contribution or funding levels. For accrual basis GAAP statements, employers in multiple-employer, cost-sharing plans (such as ERS and TRS) will be required to record a liability and expense equal to their proportionate share of the collective net pension liability and expense. The changes do not apply to governmental fund statements that are prepared using a current financial resources focus.

The net pension liability will be the difference between the total pension liability (the present value of projected benefit payments to employees based on their past service) and the plan’s fiduciary net position (mostly investments reported at fair value) set aside in a trust and restricted to paying benefits to current employees, retirees, and their beneficiaries. The new rules also require employers to present more extensive note disclosures, including descriptive information about the types of benefits provided, how contributions to the pension plan are determined, and assumptions and methods used to calculate the pension liability. Cost-sharing employers will also present required supplementary information (RSI) schedules with multiple years of information about their proportionate share of the net pension liability and their contractually required contributions.

For Georgia, these changes are effective for plan financial statements in fiscal year 2014 and for employer financial statements in fiscal year 2015.

Additional Materials for Organizations Participating in State of Georgia Plans

Government Groups Joint Report on Pension Funding and Pension Calculations

Other Resources

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