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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
Added to Current Agenda: April 2011

• Project Plan
• Recent Minutes
• Minutes Archive
• Major Tentative Decisions
• Project staff:
  • Scott Reeser
  • Roberta Reese
  • Michelle Czerkawski
  • Erin Bojarzin

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 Pension Accounting Standards. Other standards identified by the project staff as part of the research include:

• Financial Accounting Standards Board (FASB)—Statement No. 35, Accounting and Reporting by Defined Benefit Pension Plans, and Statement No. 87, Employers’ Accounting for 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 pension accounting issues in accounting and actuarial arenas has been a view of pensions reflecting the discipline of financial economics. Actuaries and financial analysts of that school of thought have expressed a distinctive analysis of pension benefits, the relationships among key parties having an interest in pension 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 pension 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 pension funding, governance, and other pension 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: The project staff conducted research into (1) the structures through which other post-employment benefits are offered and administered and assets for payment of benefits are accumulated and (2) application of the alternative measurement method described in Statements 43 and 45.

The Board discussed the results of research using annual financial reports and discussed conceptual issues related to OPEB, tentatively deciding that an employer’s obligation for other postemployment benefits meets the definition of a liability and is measureable with sufficient reliability. As a result of the staffing requirements associated with the pension project, further Board deliberations on this project were deferred until July 2012.

In July 2012, the Board revisited the results of the research using Comprehensive Annual Financial Reports and reconsidered some conceptual issues related to accounting and financial reporting for other postemployment benefits. The Board reaffirmed its tentative decision that an employer’s net obligation for other postemployment benefits, when determined by projecting future benefits payments including probabilities of future events, discounting to present value using an appropriate rate, attributing the costs to periods using an appropriate method, and subtracting net position accumulated in a qualifying trust, meets the definition of a liability in Concepts Statement No. 4, Elements of Financial Statements. The details related to projecting benefit payments and determining the discount rate and attribution method will be determined at a future meeting.

In contrast to its prior tentative decision, the Board determined that is was not appropriate to conclude at this time whether the employer’s net liability for other postemployment benefits is measurable with sufficient reliability for recognition in the financial statements. This issue will be reconsidered when the details related to measurement of the net other postemployment benefits liability are determined.

At the August 2012 Board meeting, the Board discussed the differences between pensions and OPEB not provided through qualifying trusts, and pensions and OPEB provided through qualifying trusts, as well as the various approaches of accounting for pensions and OPEB not provided through qualifying trusts used by standards setters. The Board also considered the appropriateness of accounting for pensions and OPEB not provided through qualifying trusts using an approach similar to that in Statement No. 68, Accounting and Financial Reporting for Pensions.

The Board tentatively decided that an employer’s obligation for pensions and OPEB provided outside of a trust or equivalent arrangement in defined contribution arrangements and defined benefit single-employer and agent employer arrangements meets the definition of a liability in Concepts Statement 4.

At the October 2012 meeting, the Board discussed the inclusion of OPEB provided outside of a formal, written document in the projection of benefits for the measurement of an employer’s OPEB liability. The Board tentatively decided to propose that benefits provided outside of a formal, written document should be included in the projection of benefits for the measurement of an employer’s OPEB liability when the benefits are understood by both the employer and employees to be part of the employment exchange transaction.

The Board also discussed the consideration of “cost-sharing” provisions between the employer and benefit recipients in the projection of benefits for the measurement of an employer’s OPEB liability. The Board tentatively decided to propose that employers should consider the pattern of practice with regard to the sharing of benefit costs between an employer and benefit recipients and include the employer’s cost from that pattern in the projection of benefits for the measurement of an employer’s OPEB liability.

The Board also discussed the consideration of an employer’s ability to modify benefits in the future and the impact of that ability on the projection of benefits in the measurement of an employer’s OPEB liability. The Board tentatively decided to propose that only those benefits that have been formally approved and communicated to employees be considered in the projection of benefits for the measurement of an employer’s OPEB liability.

At the October 2012 teleconference, the Board continued its discussion on issues associated with the projection of OPEB benefits in the measurement of an OPEB liability. The Board discussed coverage assumptions, healthcare cost trend rates, and other economic and demographic assumptions used by actuaries in projecting OPEB benefits. The Board tentatively decided to propose that the selection of coverage assumptions, healthcare cost trend rates, and other economic and demographic assumptions used for the projection of benefits in the measurement of an employer’s OPEB liability should be in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board.

The Board also discussed feedback received from task force members at the October 5, 2012 Task Force meeting on issues related to the projection of OPEB benefits in the measurement of an OPEB liability. The Board tentatively reaffirmed its decision to propose that the projection of benefits for the measurement of an employer’s OPEB liability should include benefits provided outside of a formal, written document, consideration of the historic pattern of sharing costs between employers and benefit recipients, and benefit changes that the employer has formally approved and communicated to employees.

At the November 2012 meeting, the Board tentatively decided that OPEB benefits that are based on a formula that include the effects of future events should be included the effects of these future events in the projection of benefits for the measurement of an employer’s OPEB liability.

The Board also discussed the inclusion of taxes or other assessments on providing OPEB benefits in the projection of benefits for the measurement of an employer’s OPEB liability. The Board considered certain potential effects of the Patient Protection and Affordable Care Act (Act), including an excise tax on employer-provided health insurance benefits provided that are determined to be an excess benefit by the Act. The Board tentatively decided to include the consideration of taxes or other assessments on providing the benefits in the projection of benefits in the measurement of an employer’s OPEB liability.

Current Developments: At its January 2013 meeting, the Board discussed issues related to the discount rate to be used to calculate the present value of projected future OPEB in the measurement of an OPEB liability. The Board tentatively decided to propose that the discount rate used in the measurement of an OPEB liability be the single rate reflecting (1) the long-term rate of return on plan investments that are expected to be used to finance the payment of benefits, to the extent that (a) the plan’s fiduciary net position is projected to be sufficient to make projected benefit payments and (b) plan assets are expected to be invested using a strategy to achieve that return and (2) a yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale), to the extent the conditions in (1) are not met.

The Board also discussed the effect of the use of an irrevocable trust on the measurement of an employer’s OPEB liability. Specifically, the Board considered the ability of a trust to return assets to the employer in circumstances in which assets accumulated in the trust are in excess of the projected benefits to be paid. The Board tentatively decided to propose that trusts that allow excess assets to be returned to the employer when the total OPEB liability has been legally defeased should be considered a trust in the measurement of an OPEB liability. However, trusts that allow assets accumulated in excess of the present value of projected benefits to be paid to be returned to the employer should not be considered a trust in the measurement of an OPEB liability.

At its February 2013 meeting, the Board discussed issues related to the attribution of the present value of expected benefits in the measurement of an OPEB liability. The Board tentatively decided to propose that the method to attribute the actuarial present value of projected benefit payments to periods of service in the measurement of an OPEB liability should be the entry age actuarial cost method with each period’s service cost determined as a level percentage of pay. The Board also tentatively decided to propose that benefits should be attributed to periods beginning in the first period in which the employee’s service accrues OPEB benefits in accordance with the OPEB arrangement, notwithstanding vesting or similar terms, through all assumed exit ages.

The Board also discussed issues related to the reliability of the measurement of a net OPEB obligation for recognition in the financial statements of a state or local government. The Board tentatively decided that an employer’s net OPEB obligation is measurable with sufficient reliability for recognition as an element of the financial statements and that the measurement sufficiently reflects the qualitative characteristics of understandability, relevance, timeliness, consistency, and comparability.


Work Plan:

Board meetings	Topics to be considered
January 2013:	Deliberate issues related to the discount rate.
February 2013:	Deliberate issues related to the attribution method and the timing and frequency of measurement.
April 2013:	Deliberate issues related to the reliability of the liability measurement and recognition of expense related to OPEB.
May 2013:	Deliberate issues related to the implicit rate subsidy.
June 2013:	Deliberate issues related to the alternative measurement method focusing on whether to continue to provide for use of an alternate measurement method.
August 2013:	Deliberate issues related to the alternative measurement method focusing on refinements of the method (if appropriate) and cost sharing and special funding arrangements
September 2013:	Deliberate issues related to community-rated provisions, contribution/caps constraints, note disclosures, and required supplemental information.
October 2013:	Deliberate issues related to plan reporting (including note disclosures and required supplemental information) and coordination with Statement 10.
December 2013:	Review drafts of standards sections of Exposure Drafts on employer and plan OPEB accounting and financial reporting issues.
January 2014:	Review drafts of illustrations of Exposure Drafts on employer and plan OPEB accounting and financial reporting issues.
March 2014:	Review preballot drafts of Exposure Drafts on employer and plan OPEB accounting and financial reporting issues.
April 2014:	Review ballot drafts and issue Exposure Drafts on employer and plan OPEB accounting and financial reporting issues.
May–July 2014:	Comment period.
August 2014:	Public hearing(s).
September 2014–March 2015:	Redeliberation of issues raised in response to the Exposure Drafts.
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, April 2-4, 2013

The Board discussed issues related to the timing and frequency of the measurement of a single or agent employer’s defined benefit other postemployment benefits (OPEB) liability. The Board tentatively decided to propose that an employer’s net OPEB liability be measured as of a date no earlier than the single or agent employer’s prior fiscal year-end, consistently applied from period-to-period. The Board also tentatively decided to propose that the frequency of actuarial valuations used to determine a single or agent employer’s net OPEB liability be at least biennial. In addition, the Board tentatively decided to propose that the timing of actuarial valuations used to determine a single or agent employer’s net OPEB liability be no more than 30 months and 1 day earlier than the employer’s most recent fiscal year-end. In circumstances in which the actuarial valuation date is not the measurement date, the Board tentatively decided to propose that update procedures be used to roll forward the information to the measurement date.

The Board also discussed issues related to the recognition of expense related to a single or agent employer’s defined benefit OPEB obligations. The Board tentatively decided to propose that contributions to an OPEB plan trust from an employer be considered a liquidation of the employer’s liability and contributions from employees be considered a reduction in the employer’s expense related to OPEB. The Board also tentatively decided to propose that the difference between the projected and actual investment return on OPEB plan assets be recognized as a deferred outflow of resources or as a deferred inflow of resources and be recognized as OPEB expense over a closed five-year period, beginning in the current period.

For effects of changes in the total OPEB liability on the measurement of a single or agent employer’s net OPEB liability, the Board tentatively decided to propose that differences between expected and actual experience with regard to economic or demographic factors (differences between expected and actual experience) and changes of assumptions about future economic or demographic factors or of other inputs (changes in assumptions) be recognized as deferred outflows of resources or deferred inflows of resources. The Board tentatively decided to propose that deferred outflows of resources and deferred inflows of resources resulting from differences between expected and actual experience and changes in assumptions be recognized as OPEB expense, beginning in the current reporting period, using a systematic and rational method over a closed period equal to the average of the expected remaining service lives of all OPEB plan participants, determined as of the beginning of the measurement period. The Board tentatively decided to propose that the effects of all other changes in the total OPEB liability on the measurement of the net OPEB liability be recognized in OPEB expense in the current reporting period.

The Board also tentatively decided to propose that contributions to an OPEB plan from a single or agent employer subsequent to the measurement date of the net OPEB liability and before the end of the employer’s reporting period be reported as a deferred outflow of resources.

Minutes of Meetings, February 19-21, 2013

The Board discussed issues related to the attribution of the present value of expected benefits in the measurement of an other postemployment benefits (OPEB) liability. The Board tentatively decided to propose that the method to attribute the actuarial present value of projected benefit payments to periods of service in the measurement of an OPEB liability be the entry age actuarial cost method with each period’s service cost determined as a level percentage of pay. The Board also tentatively decided to propose that benefits be attributed to periods beginning in the first period in which the employee’s service accrues OPEB benefits in accordance with the OPEB arrangement, notwithstanding vesting or similar terms, through all assumed exit ages.

The Board also discussed issues related to the reliability of the measurement of a net OPEB obligation for recognition in the financial statements of a state or local government. The Board tentatively decided that an employer’s net OPEB obligation is measurable with sufficient reliability for recognition as an element of the financial statements and that the measurement sufficiently reflects the qualitative characteristics of understandability, relevance, timeliness, consistency, and comparability.

Minutes of Meetings, January 8-9, 2013

The Board discussed issues related to the discount rate to be used to calculate the present value of projected future other postemployment benefits (OPEB) in the measurement of an OPEB liability. The Board tentatively decided to propose that the discount rate used in the measurement of an OPEB liability be the single rate reflecting (1) the long-term rate of return on plan investments that are expected to be used to finance the payment of benefits, to the extent that (a) the plan’s fiduciary net position is projected to be sufficient to make projected benefit payments and (b) plan assets are expected to be invested using a strategy to achieve that return and (2) a yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale), to the extent the conditions in (1) are not met.

The Board also discussed the effect of the use of an irrevocable trust on the measurement of an employer’s OPEB liability. Specifically, the Board considered the ability of a trust to return assets to the employer in circumstances in which assets accumulated in the trust are in excess of the projected benefits to be paid. The Board tentatively decided to propose that trusts that allow excess assets to be returned to the employer when the total OPEB liability has been legally defeased should be considered a trust in the measurement of an OPEB liability, However, trusts that allow assets accumulated in excess of the present value of projected benefits to be paid to be returned to the employer should not be considered a trust in the measurement of an OPEB liability.

Minutes of Meetings, November 28-30, 2012

The Board continued its discussion on the items to be included in the projection of benefits for the measurement of an employer’s OPEB liability in a defined benefit OPEB arrangement.

The Board discussed the effects of future events that impact the ultimate benefits that may be paid to a beneficiary such as automatic postemployment benefit changes, ad hoc postemployment benefit changes (to the extent they are considered substantively automatic), projected salary changes, and projected service credits. The Board tentatively decided that OPEB benefits that are based on a formula that includes the effects of future events should include the effects of these future events in the projection of benefits for the measurement of an employer’s OPEB liability.

The Board also discussed the effect of compensated absences on an employer’s OPEB liability, and whether the guidance in Statement No. 16, Accounting for Compensated Absences, should be continued. Specifically, the Board considered the requirement to include accrued sick leave that may only be used to receive additional service credits, and the requirement not to include an employer’s payment to a third party to satisfy an accrued sick leave liability in the projection of an employer’s OPEB liability for a defined benefit OPEB arrangement. The Board tentatively decided to make no change to these requirements in Statement 16.

The Board also discussed the inclusion of taxes or other assessments on providing OPEB benefits in the projection of benefits for the measurement of an employer’s OPEB liability. The Board considered certain potential effects of the Patient Protection and Affordable Care Act (Act), including an excise tax on employer-provided health insurance benefits that are determined to be an excess benefit by the Act. The Board tentatively decided to include the consideration of taxes or other assessments on providing the benefits in the projection of benefits in the measurement of an employer’s OPEB liability.

Minutes of Meetings, October 2-4, 2012

The Board discussed the inclusion of OPEB provided outside of a formal, written document in the projection of benefits for the measurement of an employer’s OPEB liability. The Board tentatively decided to propose that benefits provided outside of a formal, written document should be included in the projection of benefits for the measurement of an employer’s OPEB liability when the benefits are understood by both the employer and employees to be part of the employment exchange transaction.

The Board also discussed the consideration of “cost-sharing” provisions between the employer and benefit recipients in the projection of benefits for the measurement of an employer’s OPEB liability. The Board tentatively decided to propose that employers should consider the pattern of practice with regard to the sharing of benefit costs between an employer and benefit recipients and include the employer’s cost from that pattern in the projection of benefits for the measurement of an employer’s OPEB liability.

The Board also discussed the consideration of an employer’s ability to modify benefits in the future and the impact of that ability on the projection of benefits in the measurement of an employer’s OPEB liability. The Board tentatively decided to propose that only those benefits that have been formally approved and communicated to employees be considered in the projection of benefits for the measurement of an employer’s OPEB liability.

The remaining OPEB topics from the October staff paper will be discussed at the October teleconference.

Minutes of Meeting, August 22-24, 2012

The Board discussed the differences between pensions and other postemployment benefits (OPEB) not provided through qualifying trusts, and pensions and OPEB provided through qualifying trusts, as well as the various approaches of accounting for pensions and OPEB not provided through qualifying trusts used by standards setters. The Board also considered the appropriateness of accounting for pensions and OPEB not provided through qualifying trusts using an approach similar to that in Statement No. 68, Accounting and Financial Reporting for Pensions.

The Board tentatively decided that an employer’s obligation for pensions and OPEB provided outside of a trust or equivalent arrangement in defined contribution arrangements and defined benefit single-employer and agent employer arrangements meets the definition of a liability in Concepts Statement No. 4, Elements of Financial Statements.

Minutes of Meeting, July 10-11, 2012

The Board revisited the results of staff research using Comprehensive Annual Financial Reports and reconsidered some conceptual issues related to accounting and financial reporting for other postemployment benefits. The Board reaffirmed its tentative decision to propose that an employer’s net obligation for other postemployment benefits, when determined by projecting future benefit payments, including probabilities of future events, discounting to present value using an appropriate rate, attributing the costs to periods using an appropriate actuarial cost allocation method, and subtracting net position accumulated in a qualifying trust (as defined in paragraph 4 of Statement No. 68, Accounting and Financial Reporting for Pensions), meets the definition of a liability in Concepts Statement No. 4, Elements of Financial Statements. The details related to projecting benefit payments and determining the discount rate and attribution method will be determined at a future meeting.

In contrast to its prior tentative decision, the Board determined that it was not appropriate to conclude at this time whether the employer’s net liability for other postemployment benefits is measurable with sufficient reliability for recognition in the financial statements. This issue will be reconsidered when the details of a proposal related to measurement of the net other postemployment benefits liability are determined.

Minutes Archive

Other Postemployment Benefit Accounting and Financial Reporting —Major Tentative Decisions

The Board tentatively agreed to propose that:

• An employer’s net obligation for other postemployment benefits (OPEB), when determined by projecting future benefits payments including probabilities of future events, discounting to present value using an appropriate rate, attributing the costs to periods using an appropriate actuarial cost allocation method, and subtracting net position accumulated in a qualifying trust (as defined in paragraph 4 of GASB Statement No. 68, Accounting and Financial Reporting for Pensions), meets the definition of a liability in Concepts Statement No. 4, Elements of Financial Statements.
   
• An employer’s obligation for pensions and OPEB provided outside of a trust or equivalent arrangement in defined contribution arrangements and defined benefit single-employer and agent employer arrangements meets the definition of a liability in Concepts Statement No. 4.
   
• The projection of benefits for the measurement of an employer’s OPEB liability include:
  
  
  • Benefits provided outside of a formal, written document.
     
  • Consideration of the historic pattern of sharing costs between employers and benefit recipients.
     
  • Benefits changes that the employer has formally approved and communicated to employees.
     
  • Automatic postemployment benefit changes, ad hoc postemployment benefit changes to the extent they are considered to be substantively automatic, projected salary changes, and projected service credits when the effects of these future events impact the benefit formula.
     
  • Enhancements of service credits when unused accrued sick leave are used in the determination of service credits
     
  • Taxes or other assessments on providing the benefits.  
• The selection of coverage assumptions, healthcare cost trend rates, and other economic and demographic assumptions used for the projection of benefits in the measurement of an employer’s OPEB liability be in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board. 
   
• The discount rate used in the measurement of an OPEB liability be the single rate reflecting (1) the long-term rate of return on plan investments that are expected to be used to finance the payment of benefits, to the extent that (a) the plan’s fiduciary net position is projected to be sufficient to make projected benefit payments and (b) plan assets are expected to be invested using a strategy to achieve that return and (2) a yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale), to the extent the conditions in (1) are not met.
   
• OPEB trusts that allow excess assets to be returned to the employer when the total OPEB liability has been legally defeased be considered a trust in the measurement of an OPEB liability. However, trusts that allow assets accumulated in excess of the present value of projected benefits to be paid to be returned to the employer should not be considered a trust in the measurement of an OPEB liability.
   
• The method used to attribute the actuarial present value of projected benefit payments to periods of service in the measurement of an OPEB liability be the entry age actuarial cost method with each period’s service cost determined as a level percentage of pay.
   
• Benefits be attributed to periods beginning in the first period in which the employee’s service accrues OPEB benefits in accordance with the OPEB arrangement, notwithstanding vesting or similar terms, through all assumed exit ages.
   
• An employer’s net OPEB obligation be measurable with sufficient reliability for recognition in financial statements and the measurement sufficiently reflect the qualitative characteristics of understandability, relevance, timeliness, consistency, and comparability.
   
• For single and agent employers:
  
  
  • An employer’s net OPEB liability be measured as of a date no earlier than the prior fiscal year-end, consistently applied from period-to-period.
     
  • The frequency of actuarial valuations used to determine an employer’s total OPEB liability be at least biennial.
     
  • The timing of actuarial valuations used to determine an employer’s total OPEB liability be no more than 30 months and 1 day earlier than the employer’s most recent fiscal year-end. In circumstances in which the actuarial valuation date is not the measurement date, update procedures should be used to roll-forward the information to the measurement date.
     
  • Contributions to the OPEB plan trust from employers be considered a liquidation of the employer’s liability and contributions from employees be considered a reduction in the employer’s expense related to OPEB.
     
  • The difference between the projected and actual investment return on OPEB plan assets be recognized as a deferred outflow of resources or a deferred inflow of resources.
     
  • The difference between projected and actual investment return on OPEB plan assets be recognized over a closed five-year period, beginning in the current period.
     
  • The following effects of changes in the total OPEB liability be recognized as deferred outflows of resources or deferred inflows or resources and recognized as OPEB expense, beginning in the current reporting period, using a systematic and rational method over a closed period equal to the average of the expected remaining service lives of all employees that are provided OPEB through the plan, determined as of the beginning of the measurement period.
    
    
    • Differences between expected and actual experience with regard to economic or demographic factors
       
    • Changes of assumptions about future economic or demographic factors or of other inputs.
       
  • All changes in the total OPEB liability except for differences between expected and actual experience with regard to economic or demographic factors and changes in assumptions about future economic or demographic factors or other inputs be recognized as OPEB expense in the current reporting period.
     
  • Contributions to an OPEB plan from a single or agent employer subsequent to the measurement date of the net OPEB liability and before the end of the employer’s reporting period be reported as a deferred outflow of resources.