NEWS RELEASE 06/16/10
GASB Issues Preliminary Views on Potential Improvements to Pension Standards
Norwalk, CT, June 16, 2010—The Governmental Accounting Standards Board (GASB) has issued a Preliminary Views on Pension Accounting and Financial Reporting By Employers. The document presents the Board’s current views on what it believes are the most fundamental issues related to recognition and measurement of pension obligations by state and local government employers. The purpose of the document is to obtain comments from constituents on those views before developing more detailed proposals for changes to existing accounting and financial reporting standards. In addition to the issues addressed in the Preliminary Views, the Board will begin deliberations in July on pension note disclosures and supporting information for government employers and pension plan reporting issues.“The project to improve postemployment benefits accounting was launched by the GASB, in part, in response to feedback from users of state and local government financial reports who feel that current standards do not provide them with the information they need to adequately understand the cost and liability for benefits promised to active and retired employees,” states GASB Chairman Robert Attmore. “Following considerable staff research and review of financial reports prepared under existing standards, the Board has tentatively determined that changes are needed to improve the transparency, consistency, and comparability of reported pension information. We urge constituents to review and provide comments on the Preliminary Views on ways to increase transparency in financial reporting; enhance the decision usefulness of reported pension information; and better assist financial statement users in assessing the impact of the policy decisions and the commitments governments have made to their employees related to pension benefits.”
The Preliminary Views is part of the Board’s overall project to consider improvements to the existing standards of accounting and financial reporting for postemployment benefits. The GASB periodically reviews its standards to determine whether they continue to effectively meet their objectives.
The approach presented in the Preliminary Views would move governmental pension accounting and reporting away from the funding orientation that now exists, and instead introduce recognition and measurement standards that would be based on the GASB’s conceptual framework, including information that would help financial statement users better assess the degree to which interperiod equity has been achieved.
Most of the issues in the Preliminary Views benefited from constituent feedback received in response to the GASB’s March 2009 Invitation to Comment, Pension Accounting and Financial Reporting. The Board received written comments in response to the Invitation to Comment from nearly 120 individuals and organizations and held two days of public hearings. The Board addressed the feedback it received in developing its Preliminary Views.
The Preliminary Views, including instructions on how to submit written comments, is available for download at www.gasb.org. The deadline for submitting written comments is September 17, 2010.
In addition, the GASB has released a plain-language supplement to assist users of financial statements in commenting on the Preliminary Views. The supplement also is available for download at www.gasb.org.
The GASB will host public hearings on the Preliminary Views on October 13, 2010, 8:30 a.m. Central Time at the Hyatt Regency Dallas-Fort Worth Airport in Dallas, Texas; October 14, 2010, 8:30 a.m. Pacific Time at the offices of KPMG in San Francisco, California; and October 27, 8:30 a.m. Eastern Daylight Time at the Crowne Plaza LaGuardia in New York City. More details, and instructions for registering to participate in the hearings, will be announced in the coming weeks on the GASB website.
About the Governmental Accounting Standards Board
The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board’s diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its website www.gasb.org.