GASB Standards Address OPEB Obligations, Bankruptcies

GASB issued two statements intended to improve consistency in the measurement and financial reporting of other post-employment benefits (OPEB) such as retiree health insurance, and the effects of municipal bankruptcy.


Statement no. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans , addresses issues related to measurement of OPEB obligations by certain employers participating in agent multiple-employer OPEB plans. The standard amends Statement no. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans , and Statement no. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions.


Statement no. 57 also:


  • Enables certain agent employers to use the alternative measurement method, a less complex and potentially less expensive alternative to a full actuarial valuation.
  • Adjusts the requirement that a defined benefit OPEB plan obtain an actuarial valuation, in light of the change allowing more qualifying employers to use the alternative measurement method.
  • Clarifies that the same frequency and timing of determining OPEB measures are required for both agent multiple-employer plans and their participating employers.


Statement no. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies , provides guidance for governments that have petitioned for protection from creditors under Chapter 9 of the Bankruptcy Code. It sets requirements for recognizing and measuring the effects of bankruptcy on assets and liabilities, and for classifying changes in those items and related costs.


The provisions of Statement no. 57 related to the use and reporting of the alternative measurement method are effective immediately. The provisions related to the frequency and timing of measurements are effective for actuarial valuations first used to report funded status information in OPEB plan financial statements for periods beginning after June 15, 2011. Statement no. 58 is effective for periods beginning after June 15, 2009. Retroactive application is required for all prior periods during which a government was in bankruptcy. Early application of each statement is encouraged.


Full copies of each statement can be ordered at the GASB Web site.


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