Project Pages

Other Postemployment Benefit Accounting and Financial Reporting

Project Description: The Board will consider the possibility of improvements to the existing standards of accounting and financial reporting for other postemployment benefits (OPEB) by state and local governmental employers and by the trustees, administrators, or sponsors of OPEB plans. One objective of this project is to improve accountability and the transparency of financial reporting in regard to the financial effects of employers’ commitments and actions related to OPEB. Another objective of this project is to improve the usefulness of information for decisions or judgments of the various users of the general-purpose external financial reports of governmental employers and OPEB plans. This project also will address accounting and financial reporting for postemployment benefits that are not provided through a qualified trust (as defined in paragraph 4 of GASB Statement No. 68, Accounting and Financial Reporting for Pensions).

Status:
Currently being deliberated
Exposure Drafts Approved May 2014
Added to Current Agenda: April 2011

Other Postemployment Benefit Accounting and Financial Reporting—Project Plan


Background: This project will assess the effectiveness of the OPEB standards by examining the related OPEB standards—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. The Board’s approach to date has been to apply a common framework to accounting and financial reporting for all postemployment benefits, including both pensions and OPEB. This project will consider many of the same developments and issues encompassed by the pension project.

Conceptual Developments. Relevant conceptual points of reference that were not available when the pension standards were developed were not applied as Statements 43 and 45 were being developed in order to align the pension and OPEB standards. These concepts include:
  • The definition of a liability in Concepts Statement No. 4, Elements of Financial Statements
  • The definition of communication methods—including recognition/display in basic financial statements, notes to basic financial statements, and required supplementary information (RSI)—in Concepts Statement No. 3, Communication Methods in General Purpose External Financial Statements That Contain Basic Financial Statements.
Other OPEB Accounting Standards. Other standards identified by the project staff as part of the research include:
  • Financial Accounting Standards Board (FASB)—Statement No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, as amended by Statement No. 158, Employers’ Accounting for Defined Benefit Pension Plans and Other Postretirement Plans
  • Federal Accounting Standards Advisory Board—Statement of Federal Financial Accounting Standards 5, Accounting for Liabilities of the Federal Government
  • International Public Sector Accounting Standards Board—International Public Sector Standard 25, Employee Benefits
  • International Accounting Standards Board—International Accounting Standard 19, Employee Benefits
  • Accounting Standards Board (ASB) of the United Kingdom—Financial Reporting Standard 17, Retirement Benefits
  • Public Sector Accounting Board of the Canadian Institute of Chartered Accountants—Public Sector Accounting Handbook Section PS 3250, Retirement Benefits
  • Australian Accounting Standards Board (AASB)—AASB 119, Employee Benefits.
Other Literature. Prominent in some discussions of OPEB accounting issues in accounting and actuarial arenas has been a view of OPEB reflecting the discipline of financial economics. Actuaries and financial analysts of that school of thought have expressed a distinctive analysis of OPEB benefits, the relationships among key parties having an interest in OPEB benefits, and the effects of accounting and financial reporting standards on decision making and the investment of plan assets. This view also has stimulated spirited response within the United States from some public OPEB actuaries that favor the traditional actuarial funding model.

State commissions, research groups, and consultants in various parts of the country have issued a number of studies of OPEB funding, governance, and other OPEB issues or problems that also may be useful as reference material for this project. The findings and recommendations of studies of this nature focus on particular facts and circumstances.

Accounting and Financial Reporting Issues
: The scope of this project includes issues (a) raised in the OPEB research and by participants in the pension accounting and financial reporting research project, (b) identified in literature on the subject, or (c) identified through the staff’s review of transactions and other events affecting OPEB in the application of existing standards by OPEB plans and employers, and the way that annual financial reports have reflected the effects of events in years since the effective dates of Statements No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. It also includes consideration of relevant conceptual developments by the Board subsequent to the issuance of Statements 43 and 45 in Concepts Statements No. 3, Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements, and No. 4, Elements of Financial Statements. The scope of the project also includes consideration of more specific issues and potential improvements related to measurement, recognition, and disclosure of information about OPEB by employers and by OPEB plans. Tentative decisions reached with regard to pensions also will be considered in relation to postemployment benefits generally, consistent with the objective of maintaining a common approach and similar standards for all postemployment benefits to the extent appropriate.

The project also includes consideration of potential issues related to small governments, including issues related to the cost of implementation, and issues related to special-purpose entities, including comparability of accounting and financial reporting among governmental entities versus comparability among publicly and privately owned entities engaged in the same types of economic activity.

Project History:
  • Added to pre-agenda research: April 2011
  • Added to current technical agenda: April 2012
  • Task force established? Yes
  • Deliberations began: July 2012
  • Exposure Drafts approved: May 2014
  • Comment period: June–August 2014
Current Developments:

In May 2014, the Board approved the following three Exposure Drafts for public comment:
  • Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions
  • Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
  • Accounting and Financial Reporting for Pensions and Financial Reporting for Pension Plans That Are Not Administered through Trusts That Meet Specified Criteria, and Amendments to Certain Provisions of GASB Statements 67 and 68.
The public comment period ends August 29, 2014.

Work Plan:

Board meetings

Topics to be considered

September 2014:

Public hearing(s).

September 2014: Redeliberate scope and applicability issues and issues unique to pensions.
October 2014 (T/C): Review field test results.
November 2014: Redeliberate liability-related issues, including assumptions, projections, discount rates, and attribution method.
December 2014: Redeliberate timing and frequency of valuations and measurements, expense recognition, number of plans, and plan reporting issues.
January 2015 (T/C): Redeliberate expenditure recognition and other modified accrual accounting issues and review alternative measurement method field test results.
January 2015: Redeliberate cost-sharing and special funding situation issues and alternative measurement method issues.
February 2015 (T/C): Redeliberate component unit-related issues.
March 2015: Redeliberate note disclosures, required supplementary information, defined contribution, and other issues.

April 2015:

Review preballot drafts of final Statements.

June 2015:

Review ballot drafts and issue final Statements.


Other Postemployment Benefit Accounting and Financial Reporting—Recent Minutes


Minutes of Meetings, September 30-October 1, 2014

The Board reviewed and deliberated on issues discussed in the Exposure Draft, Accounting and Financial Reporting for Pensions and Financial Reporting for Pension Plans That Are Not Administered through Trusts That Meet Specified Criteria, and Amendments to Certain Provisions of GASB Statements 67 and 68. (Pension Exposure Draft). The Board’s deliberations included consideration of comment letters received in response to the Pension Exposure Draft and testimony provided at the public hearings.

The Board began deliberations by discussing the overall approach taken in the Pension Exposure Draft. The Board tentatively decided that the overall approach taken, which bases the accounting and financial reporting requirements on the requirements in Statement No. 68, Accounting and Financial Reporting for Pensions, continues to be appropriate.
Next, the Board considered a respondent’s request to require information about federal Social Security coverage to be provided in a note disclosure or in required supplementary information. The Board tentatively decided that these potential disclosures are outside the scope of the Postemployment Benefit Accounting and Financial Reporting project. However, the Board agreed to add this potential disclosure to the list of potential projects as part of its technical plan.

The Board then discussed a suggestion to issue the amendments to Statement No. 67, Financial Reporting for Pension Plans, and Statement 68 separate from the requirements for pensions and pension plans not administered through trusts that meet the criteria in paragraph 4 of the Pension Exposure Draft. The Board tentatively decided to issue one final Statement that includes all of the issues that were included in the Pension Exposure Draft.

The Board concluded by discussing general structure, organization, and format comments received in regard to the Pension Exposure Draft and the Exposure Drafts, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions and Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans.

Minutes of Meetings, May 28-29, 2014

The Board reviewed the ballot drafts of three proposed Statements: Accounting and Financial Reporting for Pensions and Financial Reporting for Pension Plans That Are Not Administered through Trusts That Meet Specified Criteria, and Amendments to Certain Provisions of GASB Statements 67 and 68, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.

The Board tentatively agreed on various clarifying changes to the Exposure Drafts. Finally, the Board unanimously agreed to move forward with the issuance of the three Exposure Drafts for comment.

Minutes of Meetings, April 8-10, 2014

The Board reviewed a ballot draft of an Exposure Draft, Accounting and Financial Reporting for Pensions and Financial Reporting for Pension Plans That Are Not Administered through Trusts That Meet Specified Criteria and Amendments to Certain Provisions of GASB Statements 67 and 68, tentatively agreeing on various clarifying changes to the draft.

Minutes of Meetings, March 3-5, 2014

The Board continued its discussion of the alternative measurement method to measure postemployment benefits other than pensions (OPEB) in relation to (1) default probabilities of an employee remaining employed until the assumed retirement age to use as turnover assumptions and (2) default factors for calculating age-adjusted premiums when the same premiums are charged to active and inactive employees and the employer or plan sponsor is unable to obtain age-adjusted premium information for inactive employees from the insurer or service provider. The Board tentatively agreed that when experience data on the covered group is not available, default probabilities for the turnover assumption in applying the alternative measure should be withdrawal rates by gender, age, and years of service in the most recently available annual report of the Civil Service Retirement and Disability Fund. The Board also tentatively agreed that project staff should continue to further explore options in relation to use of default probabilities in calculating age-adjusted premiums used in applying the alternative measurement method.

Next, the Board discussed expected benefits and perceived costs from proposed standards for (1) accounting and financial reporting for OPEB, (2) financial reporting for OPEB plans, and (3) accounting and financial reporting for pensions and financial reporting for pension plans that are not administered through trusts that meet specified criteria. The Board tentatively agreed that subject to additional information that will be obtained as the result of due process, including a scheduled field test, the expected benefits of information to stakeholders from the proposed standards exceed the anticipated costs to preparers and users.

The Board then discussed potential clarifying amendments to Statements No. 67, Accounting for Pension Plans, and No. 68, Accounting and Financial Reporting for Pensions, addressing requirements related to (1) notes to required supplementary information schedules for pension plans, (2) payables to the pension plan, (3) employers that have a special funding situation and receive support from nonemployer contributing entities that are not in a specific special funding situation, and (4) revenue recognition for the support of nonemployer contributing entities that make contributions that are not legally required. The Board discussed requirements for notes to required supplementary information schedules for pension plans and determined that Statement 67 should be amended to clarify that information presented in these notes related to factors that significantly affect trends in the annual money-weighted rate of return on pension plan investments is limited to factors within the control of management. Next, the Board agreed to amend Statements 67 and 68 to remove contractually deferred contributions with separate payment schedules from the category of separately financed specific liabilities to a pension plan.

The Board also tentatively decided Statements 67 and 68 should clarify that amounts to reduce payables for contractually deferred contributions with separate payment schedules should be excluded from measures of actuarially determined contributions, contractually required contributions, and statutorily required contributions that are required to be presented in schedules of required supplementary information. The Board also tentatively decided that Statement 68 should be amended to adjust the amounts recognized as revenue and expense by an employer that has a special funding situation for a separately financed liability. For employers that provide pensions through a cost-sharing plan, the Board tentatively agreed that Statement 68 should be amended to require the employer to recognize revenue and pension expense equal to the support provided by the nonemployer contributing entity. For employers that provide pensions through single or agent employer plans, Statement 68 should be amended to require the employer to recognize revenue for the support of the nonemployer contributing entity. The Board also tentatively agreed that Statement 68 should be amended to adjust the amounts recognized as expense by each employer and nonemployer contributing entity that does not have a separately financed liability by reducing expense in an amount equal to its proportionate share of the contributions recognized by the pension plan for separately financed specific liabilities of other employers or nonemployer contributing entities. Next, the Board tentatively decided that guidance should be added to the Comprehensive Implementation Guide to clarify the accounting and financial reporting for an employer that has a special funding situation and also receives support from a nonemployer contributing entity that is not in a special funding situation. The Board also tentatively decided that Statement 68 should be amended to clarify that revenue should be recognized in the period in which the change in the net pension liability is reported for the support of nonemployer contributing entities that are not in a special funding situation, rather than in conformity with the revenue recognition requirements of Statement No. 24, Accounting and Financial Reporting for Certain Grants and Other Financial Assistance.

The Board also reviewed preballot drafts for proposed Statements on (1) accounting and financial reporting for OPEB, (2) financial reporting for OPEB plans, and (3) accounting and financial reporting for pensions and financial reporting for pension plans that are not administered through trusts that meet specified criteria. The Board tentatively agreed to various clarifying changes to the drafts and directed the project staff to prepare ballot drafts for the proposed Statements.

Minutes of Meetings, January 27-29, 2014

The Board continued a discussion from its December Board meeting on the effective date for the implementation of the proposed Statement on accounting and financial reporting for postemployment benefits other than pensions (OPEB). Project staff presented feedback from the OPEB Accounting and Financial Reporting Task Force regarding proposing an effective date for employers that administer OPEB outside of qualifying trusts, or equivalent arrangements, one year earlier than for those employers that administer OPEB through trusts. The Board tentatively decided to propose that the proposed Statement for OPEB accounting and financial reporting be effective for fiscal years beginning after December 15, 2016, with earlier implementation encouraged, for all employers regardless of whether or not a trust is used to administer the OPEB. The Board also changed its previous tentative decision for the effective date of the proposed Statement for OPEB plans from fiscal years beginning after June 15, 2016, to fiscal years beginning after December 15, 2015, with earlier implementation encouraged. In addition, the Board tentatively decided to propose that the proposed Statement for accounting and financial reporting for pensions that are not administered through trusts be for fiscal years beginning after June 15, 2016, with earlier implementation encouraged.

The Board also reviewed preliminary draft standards sections of the Exposure Drafts for (1) accounting and financial reporting for OPEB and (2) accounting and financial reporting for pensions that are not administered through trusts. The Board provided recommendations and suggestions for clarification on the draft documents. Subject to those clarifications and revisions, the Board directed the project staff to prepare a preballot draft for consideration at the March 2014 Board meeting.

The Board also reviewed proposed illustrations for the proposed Statement for OPEB plans and provided recommendations and suggestions for clarification on the illustrations.

Minutes of Meetings, October 29-31, 2013

The Board continued discussions related to the use of an alternative measurement method for calculating an employer’s other postemployment benefit (OPEB) liability for small employers. The Board tentatively decided to propose that in using the alternative measurement method to measure OPEB liabilities, the expected point in time at which benefits will be provided should reflect past experience and future expectations for the covered group. The Board also tentatively decided to propose that the expected point in time in which benefits will be provided be a single assumed retirement age for all active employees or an assumption that all active employees will retire upon attaining a certain number of years of service.

The Board tentatively decided to propose that the use of historical age-based turnover experience of the covered group be used to determine turnover assumptions in the alternative measurement method. The Board also tentatively decided to propose that if such experience data is not available to determine turnover assumptions, the alternative measurement method utilize default tables (provided by the GASB) to determine turnover assumptions.

The Board tentatively decided to propose that the expected future working lifetime of plan members be the difference between the employee’s current age and the employee’s assumed retirement age for purposes of allocating the present value of expected benefits to periods. In addition, the Board tentatively decided to propose that the alternative measurement method utilize default factors (provided by the GASB) for calculating age-adjusted premiums when active employees and retirees are charged the same premiums and the employer is unable to obtain age-adjusted premium information for retirees from the insurer.

The Board also considered the coordination of the tentative decisions made to date in the OPEB project with other accounting and financial reporting standards related to employee benefits. The Board tentatively decided that existing guidance in Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, as amended, related to accounting and financial reporting for insurance and risk financing should continue to exclude OPEB. The Board also tentatively decided that no changes should be made to the current approach in Statement No. 47, Accounting for Termination Benefits, related to accounting and financial reporting for the effect of a termination benefit on an employer’s defined benefit OPEB.

The Board also discussed issues related to accounting and financial reporting of plans that administer defined benefit OPEB in trusts. For financial reporting of assets of an OPEB plan, the Board tentatively decided to propose that an OPEB plan display major categories of assets held, with the principal components of the receivables and investments categories displayed separately. In relation to receivables of the OPEB plan, the Board tentatively decided to propose that amounts recognized as receivables for contributions to the OPEB plan include only contributions due to legal requirements, and receivables for contributions that are payable to the plan more than one year after the end of the reporting period be recognized in full in the period the receivable arises. In relation to investments of the OPEB plan, the Board tentatively decided to propose that purchases and sales be recognized on a trade-date basis. In addition, the Board tentatively decided to propose that investments of the OPEB plan be reported at their fair value except (1) open-ended mutual funds, external investment pools, and interest-earning investment contracts should be measured as provided in Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, paragraphs 7-11, as amended, and in Statement No. 59, Financial Instruments Omnibus, paragraph 5; (2) investments in life insurance should be reported at cash surrender value; and (3) unallocated insurance contracts should be reported as interest-earning investment contracts. The Board also tentatively decided to propose that allocated insurance contracts be excluded from plan assets if (1) the contract irrevocably transfers to the insurer the responsibility for providing the benefits, (2) all required payments to acquire the contract have been made, and (3) the likelihood is remote that the employer or the pension plan will be required to make additional payments to satisfy the benefit payments covered by the contract.

For financial reporting of liabilities of an OPEB plan, the Board tentatively decided to propose that plan liabilities be recognized when due and payable, and benefit payables from allocated insurance contracts that are excluded from assets be excluded from recognition as plan liabilities.

The Board tentatively decided that assets, plus deferred outflows of resources, less liabilities, less deferred inflows of resources should be reported as net position restricted for OPEB.

For financial reporting of additions to an OPEB plan’s fiduciary net position, the Board tentatively decided to propose that plan additions include separate display of contributions from employers, contributions from nonemployer contributing entities, contributions from plan members (including those transmitted by employers) and net investment income. The Board also tentatively decided to propose that the net investment income components of investment income and investment expense, if separable from investment income and the administrative expenses, be separately displayed. In addition, the Board tentatively decided to propose that realized and unrealized gains and losses not be separately displayed but may be disclosed if the disclosure states that the calculation of realized gains and losses is independent of the calculation of the net change in the fair value of plan investments and realized gains and losses on investments that have been held in more than one reporting period and sold in the current period were included as a change in the fair value reported in the prior period(s) and the current period.

For financial reporting of deductions to an OPEB plan’s fiduciary net position, the Board tentatively decided to propose that reporting of plan deductions of the statement of changes in fiduciary net position include separate display of benefit payments and administrative expense. The Board also tentatively decided to propose that amounts paid to an insurance company pursuant to allocated insurance contracts excluded from plan assets be included in amounts recognized as benefits paid, and benefit payments not include benefits paid by an insurance company. In addition, the Board tentatively decided to propose that dividends from allocated insurance contracts be recognized as a reduction of benefit payments in the period.
The Board also discussed information to be provided as notes to financial statements. The Board tentatively decided to propose that the following information be included in the notes to the financial statements of a defined benefit plan administered as a trust:
  • Information related to plan description:
    • Name of plan
    • Identification of the entity that administers the plan
    • Identification of the plan as a single-employer, agent multiple-employer, or cost-sharing multiple-employer defined benefit OPEB plan
    • The number of participating employers (if the OPEB plan is a multiple-employer OPEB plan) and the number of nonemployer contributing entities, if any
    • Information regarding the OPEB plan’s board and its composition
    • Classes of plan members covered by the benefit terms including separately identifying numbers of inactive plan members currently receiving benefits, inactive plan members entitled to but not yet receiving benefits, and active plan members
    • That the OPEB plan is closed to new entrants, if applicable
    • Authority under which benefit provisions are established or may be amended and types of benefits provided through the OPEB plan
    • If the OPEB plan or the entity that administers the OPEB plan has the authority to establish or amend benefit terms, a brief description of the benefit terms, including the key elements of the OPEB formulas and the terms of policies, if any, with respect to automatic postemployment benefit changes, including automatic cost-of-living adjustments, ad hoc postemployment benefit changes, including ad hoc cost-of-living adjustments, and the sharing of the benefit cost between the employer(s) and plan members, if applicable, and whether that sharing of costs is based on terms or policies or that the sharing of costs is based on an historical pattern.
  • Information related to investments:
    • A brief description of how fair value of investments is determined, including the methods and significant assumptions used to estimate the fair value of investments if that fair value is based on other than quoted market prices.
    • Investment policies, including:
      • Procedures and authority for establishing and amending investment policy decisions
      • Policies pertaining to asset allocation
      • Description of significant investment policy changes during the reporting period.
    • Identification of investments (other than those issued or explicitly guaranteed by the U.S. government) in any one organization that represents 5 percent or more of the OPEB plan’s fiduciary net position.
    • The annual money-weighted rate of return on OPEB plan investments calculated as the internal rate of return on OPEB plan investments, net of OPEB plan investment expense, and an explanation that a money-weighted rate of return expresses investment performance, net of OPEB plan investment expense, adjusted for the changing amounts actually invested. OPEB plan investment expense should be measured on the accrual basis of accounting. Inputs to the internal rate of return calculation should be determined at least monthly with the use of more frequently determined inputs encouraged.
  • Information related to contributions and reserves:
    • A brief description of contribution requirements, including (1) identification of the authority under which contribution requirements of employers, nonemployer contributing entities, if any, and plan members are established or may be amended and (2) the contribution rates (in dollars or as a percentage of covered payroll) of those entities for the reporting period.
    • If the OPEB plan or the entity that administers the OPEB plan has the authority to establish or amend contribution requirements--the basis for determining contributions. Also, legal or contractual maximum contribution rates, if applicable.
    • The terms of any long-term contracts for contributions to the OPEB plan between (1) an employer or nonemployer contributing entity and (2) the OPEB plan, and the balances outstanding on any such long-term contracts at the end of the OPEB plan’s reporting period.
    • In circumstances in which there is a policy of setting aside, for purposes such as benefit increases or reduced employer contributions, a portion of the OPEB plan’s fiduciary net position that otherwise would be available for existing OPEB or for OPEB plan administration: a description of the policy related to such reserves, the authority under which the policy was established and may be amended, the purposes for and conditions under which the reserves are required or permitted to be used, and the balances of the reserves.
  • Information related to the purchase of allocated insurance contracts that are excluded from plan assets:
    • The amount reported in benefit payments in the current period that is attributable to the purchase of allocated insurance contracts
    • A brief description of the OPEB for which allocated insurance contracts were purchased in the current period
    • The fact that the obligation for the payment of benefits covered by allocated insurance contracts has been transferred to one or more insurance companies.
  • For single-employer and cost-sharing employers:
    • The total OPEB liability, the OPEB plan’s fiduciary net position, the net OPEB liability, and the OPEB plan’s fiduciary net position as a percentage of the total OPEB liability.
    • Actuarial assumptions:
      • Significant assumptions and other inputs used to measure the total OPEB liability, including assumptions about inflation, salary changes, and ad hoc postemployment benefit changes (including ad hoc COLAs).
        • With regard to mortality assumptions—the source of the assumptions (for example, the published tables on which the assumption is based or that the assumptions are based on a study of the experience of the covered group).
        • The dates of experience studies on which significant assumptions are based also should be disclosed.
        • If different rates are assumed for different periods—information about what rates are applied to the different periods of the measurement.
      • Information related to the discount rate:
        • The discount rate applied in the measurement of the total OPEB liability and the change in the discount rate since the OPEB plan’s prior fiscal year-end, if any
        • Assumptions made about projected cash flows into and out of the OPEB plan, such as contributions from employers, nonemployer contributing entities, and plan members
        • The long-term expected rate of return on OPEB plan investments and a description of how it was determined, including significant methods and assumptions used for that purpose
        • If the discount rate incorporates a municipal bond rate, the municipal bond rate used and the source of that rate
        • The periods of projected benefit payments to which the long-term expected rate of return and, if used, the municipal bond rate, are applied to determine the discount rate
        • The assumed asset allocation of the OPEB plan’s portfolio, the long-term expected real rate of return for each major asset class, and whether the expected rates of return are presented as arithmetic or geometric means, if not otherwise disclosed
        • Measures of the OPEB plan’s net OPEB liability resulting from a 1-percentage-point increase and a 1-percentage-point decrease in the discount rate. In addition, for each of these measurements, the plan’s net OPEB liability and a measurement of the plan’s net OPEB liability resulting from a 1-percentage-point increase and a 1-percentage-point decrease in the healthcare trend rate.
    • The date of the actuarial valuation on which the total OPEB liability is based and, if applicable, the fact that update procedures were used to roll forward the total OPEB liability to the OPEB plan’s fiscal year-end.
The Board also discussed required supplementary information to be presented by defined benefit OPEB plans that are administered as trusts. The Board tentatively decided to propose that defined benefit OPEB plans administered as trusts present the following information as required supplementary information:
  • A 10-year schedule of the annual money-weighted rate of return on OPEB plan investments.
  • For single-employer and cost-sharing employer defined benefit OPEB plans administered as trusts:
    • A 10-year schedule that separately presents:
      • The total OPEB liability
      • The OPEB plan’s fiduciary net position
      • The net OPEB liability
      • The OPEB plan’s fiduciary net position as a percentage of the total OPEB liability
      • The covered-employee payroll
      • The net OPEB liability as a percentage of the covered-employee payroll
    • A 10-year schedule presenting information related to actuarially determined contributions, if calculated:
      • The actuarially determined contribution of the employers or nonemployer contributing entities
      • For cost-sharing plans, the contractually required contributions of employers or nonemployer contributing entities, if different from the actuarially determined contributions
      • The amount of contributions recognized by the OPEB plan in relation to the actuarially determined contribution of the employer
      • The difference between the actuarially determined contribution of the employers and nonemployer contributing entities and the amount of contributions recognized by the OPEB plan in relation to the actuarially determined contribution of the employers and nonemployer contributing entities
      • The covered-employee payroll
      • The amount of contributions recognized by the OPEB plan in relation to the actuarially determined contribution of the employers and nonemployer contributing entities as a percentage of covered-employee payroll.
    • A 10-year schedule of changes in the net OPEB liability, separately presenting the following information for each year:
      • The beginning balances of total OPEB liability, OPEB plan fiduciary net position, and net OPEB liability.
      • The effects during the period on the total OPEB liability, OPEB plan fiduciary net position, and net OPEB liability of the following items:
        • Service cost
        • Interest on the total OPEB liability
        • Changes of benefit terms
        • Differences between expected and actual experience in the measurement of the total OPEB liability
        • Changes of assumptions or other inputs
        • Contributions from the employer
        • Contributions from nonemployer contributing entities
        • Contributions from employees
        • OPEB plan net investment income
        • Benefit payments, including refunds of employee contributions
        • OPEB plan administrative expense
        • Other changes, separately identified if individually significant.
      • The ending balances of total OPEB liability, OPEB plan fiduciary net position, and net OPEB liability
The Board also tentatively decided to propose that notes to required supplementary information include information about factors that significantly affect trends in the amounts presented for the schedules in required supplementary information. In addition, the Board tentatively decided to propose that single employer and cost-sharing employer plans include significant methods and assumptions used in calculating the actuarially determined contributions in notes to required supplementary information.

The Board also considered issues related to accounting and financial reporting for OPEB arrangements that are not administered as trusts. The Board tentatively decided to propose that funds used to accumulate assets and pay OPEB for multiple employers be reported as agency funds with assets and liabilities recognized in the same manner as assets and liabilities held by defined benefit OPEB plans administered as trusts. The Board also tentatively decided to propose that assets held in excess of liabilities in these circumstances be offset by liabilities to participating employers.

The Board tentatively decided to propose that the notes to the financial statements for multiple-employer OPEB arrangements that do not meet the criteria to be reported as a trust include the following:
  • Disclosure of the number of participating employers and nonemployer contributing entities, if any
  • A brief description of how the fair value of investments is determined, including the methods and significant assumptions used to estimate the fair value of investments, if that fair value is based on other than quoted market prices
  • Authority under which obligations of the plan members, employers, and other contributing entities, if any, to contribute are established or may be amended
  • Brief description of how the contributions of plan members, employers, and nonemployer contributing entities are determined and how the costs of administering the plan are financed
  • Required contribution rate(s) of active or retired plan members, as applicable, expressed as a rate (amount) per member or as a percentage of covered payroll
  • Description of any long-term contracts for contributions to the plan and disclosure of the amounts outstanding at the reporting date.
The Board also discussed issues related to accounting and financial reporting of pension arrangements that are not administered as trusts. The Board tentatively decided to propose that the tentative decisions in relation to accounting and financial reporting for OPEB arrangements that are not administered as trusts be applied to pension arrangements that are not administered as trusts.

Minutes Archive
 

Other Postemployment Benefit Accounting and Financial Reporting—Tentative Board Decisions


These tentative decisions have been made since the issuance of the Exposure Drafts and in anticipation of a final Statement. The Board tentatively agreed to propose that:
  • The overall approach taken in the Exposure Draft, Accounting and Financial Reporting for Pensions and Financial Reporting for Pension Plans That Are Not Administered through Trusts That Meet Specified Criteria, and Amendments to Certain Provisions of GASB Statements 67 and 68 (Pension Exposure Draft), which bases the accounting and financial reporting requirements on the requirements in Statement 68, continues to be appropriate.
  • Potential disclosures about federal Social Security coverage be excluded from the Postemployment Benefit Accounting and Financial Reporting project.