GASB Exposure Draft Seeks Enhanced Pension Disclosure Requirements | AccountingWEB

GASB Exposure Draft Seeks Enhanced Pension Disclosure Requirements

The Governmental Accounting Standards Board (GASB) on December 15 issued a Proposed Statement regarding Pension Disclosures. The changes outlined in the Exposure Draft would enhance accountability, improving the usefulness of financial information about pensions and bringing disclosure requirements for governments and governmental pension plans into line with those recently issued for other post-employment benefits or OPEBs.

“Today’s [Dec. 15] proposal reflects our commitment to ensuring that users of governmental financial statements have access to the highest-quality information available to make their decisions,” said Robert Attmore, GASB Chairman. “The Exposure Draft would accomplish this by making the improved disclosures introduced in the OPEB standards applicable to all retirement benefits.”

Specifically, the proposed Statement would amend GASB Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosure for Defined Contribution Plans and No. 27, Accounting for Pensions by State and Local Governmental Employers by requiring:

  1. Disclosure of the current funded status of the plan as the most recent actuarial valuation date in the notes to the financial statements of pension plans and certain employer governments to be presented in addition to funded status data currently presented as required supplementary information (RSI).

  2. Disclosure by governments that use the aggregate actuarial cost method of the funded status and present a multiyear schedule of funding progress using the entry age actuarial cost method as a surrogate; these governments currently do not provide this information.

  3. Additional note disclosures about actuarial methods and assumptions used in the valuations underlying information reported about the annual required contribution and funded status of the pension plan.

  4. Disclosure by governments participating in cost-sharing pension plans of how the contractually required rate is determined.

  5. Presentation by governments in cost-sharing plans of the required schedule of funding progress if the plan does not issue a GAAP-compliant report that includes RSI or if the plan is not included in a publicly available financial report of another entity.

The requirements of the proposed Statement would become effective for periods beginning after June 15, 2007, with early implementation encouraged. The GASB is seeking comments on the proposal by February 28, 2007.

In addition to the proposed Statement, Chairman Attmore notes the GASB is concurrently conducting a broader research project to determine whether existing accounting standards for government pensions have been effective. The board will determine at a future date whether further changes to the current pension standards are necessary based upon the constituent feedback received and analysis conducted as part of the research project.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

WHAT KIND OF FIRM ARE YOU?
As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.