News Release 12-31-09


GASB Issues Final Statements on OPEB Measurements and Chapter 9 Bankruptcies

Norwalk, CT, December 31, 2009—The Governmental Accounting Standards Board (GASB) today issued Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans and Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies. The Statements are intended to improve consistency in the measurement and financial reporting of other postemployment benefits (OPEB) such as retiree health insurance, and of the effects of municipal bankruptcy.

Statement 57 addresses issues related to measurement of OPEB obligations by certain employers participating in agent multiple-employer OPEB plans. (In agent multiple-employer plans, separate liabilities are calculated and separate asset accounts are kept for each participating government, rather than being administered and accounted for as a single plan as is done in a cost-sharing plan.) Statement 57 amends 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. Specifically, Statement 57:

  • Enables certain agent employers to use the alternative measurement method, a less complex and potentially less expensive alternative to a full actuarial valuation
  • Adjusts the requirement that a defined benefit OPEB plan obtain an actuarial valuation, in light of the change allowing more qualifying employers to use the alternative measurement method
  • Clarifies that the same frequency and timing of determining OPEB measures are required for both agent multiple-employer plans and their participating employers.

Statement 58 provides guidance for governments that have petitioned for protection from creditors by filing for bankruptcy under Chapter 9 of the United States Bankruptcy Code. It establishes requirements for recognizing and measuring the effects of the bankruptcy process on assets and liabilities, and for classifying changes in those items and related costs.

"The stress that the current economic environment is putting on state and local government resources and the lack of existing financial reporting guidance made it necessary for the GASB to address the financial reporting issues associated with qualified local governments that file for bankruptcy protection under Chapter 9," said Robert Attmore, chairman of the GASB.

The provisions of Statement 57 related to the use and reporting of the alternative measurement method are effective immediately. The provisions related to the frequency and timing of measurements are effective for actuarial valuations first used to report funded status information in OPEB plan financial statements for periods beginning after June 15, 2011. Statement 58 is effective for periods beginning after June 15, 2009. Retroactive application is required for all prior periods presented during which a government was in bankruptcy. Earlier application of both Statements is encouraged.

For information on obtaining Statements 57 and 58, log on to the GASB Store.

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,