A practice issue that caused certain state and local governments difficulty in complying with new pension accounting rules was addressed in final guidance issued by the Governmental Accounting Standards Board (GASB) on Dec. 11.
The guidance is designed to assist governments whose employees are provided pensions through certain private or federally sponsored multiple-employer defined plans, such as Taft-Hartley plans and others with similar characteristics.
During implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, some stakeholders raised concerns regarding the inability of a small group of governments to obtain measurements and other relevant data points needed to comply with the pension standard's requirements.
The new guidance contained in GASB Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, helps these governments by focusing employer accounting and financial reporting requirements for those pension plans on obtainable information.
Under Statement 78, separate reporting requirements will be established for employers that participate in these pension plans. It also establishes the criteria for identifying the applicable pension plans.
In addition, the guidance focuses on:
Measurement and recognition of pension liabilities, expense, and expenditures.
Note disclosures of descriptive information about the plan, benefit terms, and contribution terms.
Required supplementary information presenting required contribution amounts for the past 10 fiscal years.
âThis new guidance removes an impediment to complying with the GASB's financial reporting requirements for governments participating in certain multiple-employer defined benefit pension plans,â GASB Chairman David Vaudt said in a written statement. âIt also promotes enhanced consistency among those applying the standards.â