GASB provides assistance on pension accounting issue

By Ken Tysiac

GASB issued new accounting and financial reporting guidance Friday to assist certain state and local governments that are having trouble obtaining measurements and data points to comply with the board’s new pension standard.

Governments that participate in certain private or federally sponsored multiple-employer defined benefit plans, such as Taft-Hartley plans and plans with similar characteristics, have had problems complying with GASB Statement No. 68, Accounting and Financial Reporting for Pensions.

The guidance issued Friday in GASB Statement No. 78, Pensions Provided Through Certain Multiple-Employer Defined Benefit Pension Plans, helps these governments by focusing employer accounting and financial reporting requirements on obtainable information.

Employers that participate in the affected plans will have separate requirements under the new guidance. Statement No. 78 establishes criteria for identifying the applicable pension plans. The statement also addresses:

  • Measurement and recognition of pension liabilities, expense, and expenditures.
  • Note disclosures of descriptive information about the plan, benefit terms, and contribution terms.
  • Required supplementary information presenting required contribution amounts for the past 10 fiscal years.

“This new guidance removes an impediment to complying with the GASB’s financial reporting requirements for governments participating in certain multiple-employer defined benefit pension plans,” GASB Chairman David Vaudt said in a news release. “It also promotes enhanced consistency among those applying the standards.”

Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.

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