GASB’s new standard governing financial reporting for state and local government pensions will be implemented as scheduled after the board voted unanimously Monday not to delay the implementation date.
As a result of the vote, the requirements of Statement No. 68, Accounting and Financial Reporting for Pensions, will still go into effect for periods beginning after June 15, 2014.
Stakeholder groups had requested an indefinite delay in the implementation date, according to a GASB news release. They said a delay was necessary to allow time for related auditing procedures to be implemented and were concerned that governments in multiple-employer pension plans would receive a modified audit opinion in their financial statements as a result, according to GASB.
But other individuals, organizations, and stakeholder groups wrote to GASB requesting that the implementation date remain the same.
GASB Chairman David Vaudt said in a statement that the board agreed that the issues raised warranted thoughtful consideration.
“The GASB is committed to doing everything it can to assist governments, pension plans, and their auditors with the implementation of Statement 68, including working with stakeholder groups,” Vaudt said. “However, the board does not believe that delaying implementation will benefit its stakeholders in general.”
Factors the board considered included:
- Based on feedback received, according to GASB, many governments would face a similar prospect of a modified audit opinion even if they were to follow the previous pension standards.
- Pension plans already are implementing the associated Statement No. 67, Financial Reporting for Pension Plans. If implementation of Statement No. 68 were postponed, some governments would incur the added cost of engaging an actuary to provide information under the old standards in addition to the information already obtained under the new standards, according to GASB.
- Financial statement users expressed a strong preference not to delay Statement 68.
- When the board established the original implementation date, it was aware of concerns about the effort required to implement the statement, particularly with regard to governments in some cost-sharing, multiple-employer pension plans. The board did not see any new evidence that would result in changing its original conclusion.
—Ken Tysiac (firstname.lastname@example.org) is a JofA senior editor.