In 2015, the Governmental Accounting Standards Board (GASB) released a new reporting standard specifically related to post-employment benefits (OPEB) other than pensions. This new standard, GASB Statement No. 74, “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans,” revised the reporting requirements previously mandated under GASB 43. Public OPEB plans are required to comply with the new requirements beginning with the first plan fiscal year after June 15, 2016. Most of GASB 74 applies to plans administered through trusts in which contributions are irrevocable, trust assets are dedicated to providing OPEB to plan members and trust assets are legally protected from creditors.
In 2015, GASB No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions,” was also introduced and is effective for employer fiscal years beginning after June 15, 2017. Whereas GASB 74 is limited to the OPEB plans to which it applies, GASB 75 applies to all OPEB plans. GASB 75 requires a “net OPEB liability” on the government’s statement of net position. Prior to GASB 75, the funded or unfunded actuarial liability was disclosed in the notes to the financial statements and as required supplementary information.
Many of the provisions of GASB 74 and 75 for OPEB parallel the provisions of GASB 67 and 68 for pensions, discussed in a previous blog, including similar terminology, methodologies and reporting requirements. With GASB 74 and 75, the new statements should substantially improve the transparency, consistency and comparability of the OPEB information reported by state and local governments and OPEB plans.
As these changes illustrate, there are complex statutes that govern municipalities and the OPEB plans they provide. The Univest Municipal Pension Services team has the experience and expertise to provide comprehensive pension and OPEB investment and compliance services. To learn more contact us at 800-501-0045.
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