GASB to propose changes to accounting for state pensions

By AccountingWEB Staff

The Government Accounting Standards Board (GASB) will propose changes later this month to the method used by most U.S. state and local governments when they report unfunded pension liabilities on their balance sheets. The proposed changes could result in an increase in the amount of liabilities governments will report.

Currently most public pension plans spread the cost of paying off their unfunded pension liabilities, on average, over a 24- to 25-year period, according to Keith Brainard, research director for the National Association of State Retirement Administrators, The Wall Street Journal reports.

The GASB proposals call for government pension plans to record unfunded pension liabilities as if they were paying them off over the remaining service life of employees in the system - an average of about 10 to 15 years for all public plans, Brainard said. Brainard spoke at a Washington conference sponsored by the Pew Center on the States.

The new rules will not change how fast public pension plans must pay off their unfunded obligations, GASB Chairman Robert H. Attmore said at the conference. "We want people to be transparent and disclose exactly what it is they're doing and the market will make their judgments based on that. The economics don't change."

The proposed changes would also make it easier for investors to compare public pension plans across states.

The proposals will be open for public comment for 90 days and are not expected to take effect for two years.

Related items:

 

You may like these other stories...

Internal audit: Know when to discloseIn an excerpt from his book, Lessons Learned on the Audit Trail, Institute of Internal Auditors President and CEO Richard F. Chambers said if you analyze enough audit reports, you can...
The Governmental Accounting Standards Board (GASB) on Monday defined two approaches for measuring assets and liabilities, which officials said will guide the standard-setting organization in establishing accounting and...
The criteria for reporting a discontinued operation on financial statements was revised by the Financial Accounting Standards Board (FASB) on Thursday.According to Accounting Standards Update No. 2014-08, Presentation of...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.