In addition to pensions, many state and local governmental employers provide other postemployment benefits (OPEB) as part of the total compensation offered to attract and retain the services of qualified employees. OPEB includes postemployment healthcare, as well as other forms of postemployment benefits, such as life insurance, when provided separately from a pension plan. The proposed Statement on employer reporting would establish standards for the measurement, recognition and display of OPEB expense or expenditures and related liabilities in the financial reports of state and local governments.
“Currently, most governmental employers finance OPEB plans on a pay-as-you-go basis, and financial statements generally do not report financial effects of OPEB until the promised benefits are paid, often many years after the related employee services are received,” said Project Manager Karl Johnson.
Under the proposed accounting change, governments would:
The companion Exposure Draft would establish uniform financial reporting standards for OPEB plans and would supersede the previously issued interim guidance.
The proposed overall approach to reporting of OPEB generally is consistent with that adopted by the GASB for pension reporting.
Both Exposure Drafts may be obtained through the GASB Order Department at 800-748-0659.
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.
Governmental Accounting Standards Board
Improving governmental accountability through better financial reporting