Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans amends GASB Statement No. 25. Statement No. 67 was issued June 2012 and will become effective for plan financial statements for fiscal years beginning after June 15, 2013 or for TRS in state fiscal year 2014.
TRS is actively studying and researching the new standards and preparing for GASB 67 with an implementation date of August 31, 2014 for the pension plan’s report.
GASB Statement No. 68, Accounting and Financial Reporting for Pensions amends GASB Statement No. 27. Statement No. 68 was issued June 2012 and will become effective for financial statements for fiscal years beginning after June 15, 2014.
Together these statements define how pension liabilities will be calculated and reported by employers and other non-employer contributing entities.
Note: Statement 68 applies only to pension benefits and does not apply to Other Post-Employment Benefits (OPEB) or TRS-Care related liabilities.
Annual Financial Report of Reporting Entity –Statement 68 will require reporting entities to recognize operating statement activity related to changes in the collective pension liability. TRS will be working with state leadership and oversight agencies to determine who will report the unfunded pension liability on their balance sheet. The question regarding if the state will report the entire liability or will the liability be allocated proportionately between the state and the reporting entities has yet to be answered. This decision and others must be made in order for the state and reporting entities to implement GASB Statement 68 for employers during fiscal year 2015.
Further updates will be posted as decisions and guidance become available.
New GASB Accounting Changes
Questions and Answers
GASB issued Statements No. 67 & 68 in June, 2012 that changed current pension accounting and financial reporting standards for state and local governments.
The new standards will change how pension plan liabilities are accounted for and disclosed in financial statements of public pensions and participating employers. The new standards do not affect or alter how public employee pensions are funded or how employer contribution rates are calculated.
Why did it Change?
To separate pension plan accounting from decisions on how to fund them, and to provide additional transparency regarding the reporting of pension liabilities and expenses and the impact of these obligations on the financial statements.
Who does it affect?
Pension plans along with the participating employers who contribute to these plans.
When is it effective?
The new standards are effective for fiscal years beginning after June 15, 2013 for public pension plans and for fiscal years beginning after June 15, 2014 for participating employers.
What is the impact?
The new standards state that employers participating in a cost-sharing, multiple-employer plan in many cases will need to report a net pension liability and expense equal to their proportionate share of the collective net pension liability and expense in their financial statements. TRS and other state agency staff are researching the applicability of this provision to TRS reporting entities.