Overview
Governmental Accounting Standards Board Statement No. 68, “Accounting and Financial Reporting for Pensions,” amends GASB 27 and significantly updates how state and local governments report pension obligations. This standard applies to employers providing pensions through trusts that meet strict criteria for contribution irrevocability, benefit dedication, and asset protection from creditors.
What This Means for Your Organization
GASB 68 introduces clear guidelines for recognizing pension liabilities, deferred inflows/outflows, and related expenses. It also details the methods and assumptions for projecting benefit payments, discounting to present value, and attributing pension costs to periods of employee service. These requirements vary based on employer type, whether single, agent, or cost-sharing.
What We’re Asking Clients to Do
McMahan and Associates encourages clients to review their pension plan classification and reporting requirements under GASB 68. Proper understanding of your plan type—single, agent, or cost-sharing—and how assets and obligations are pooled is essential for compliance.
Available Resources
To support your implementation of GASB 68, we’ve provided the following resource:
This document outlines the core requirements of the standard and identifies key financial statement disclosure updates and supplementary information needs.
Looking Ahead
GASB 68 became effective for fiscal years beginning after June 15, 2014. Early adoption was encouraged. As your auditors, we will work with you to ensure your pension-related disclosures and reporting meet the latest GASB standards.
Conclusion
Navigating the changes introduced by GASB 68 can be challenging, but with early preparation and clear understanding of your pension structure, compliance is achievable. If you need assistance determining your plan classification or implementing GASB 68 requirements, our team is ready to help.
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