The staff of the Governmental Accounting Standards Board has created a fact sheet to clear up some of the misconceptions about the recent changes in public pension accounting standards.
GASB’s new standards will affect the way that states and municipalities account for and contribute to their public employee pension plans (see GASB Approves New Pension Accounting and Reporting Standards). In response to questions it has received about the new standards, the GASB staff has created a fact sheet consisting of questions and answers that should help clarify the facts and dispel some misperceptions about the new pension standards.
• Do the new standards establish requirements for how governments should fund their pensions?
• Will governments have to pay more each year for pensions because of the new standards?
• Do the GASB standards allow governments to make their liabilities look smaller than they really are?
• Has the GASB determined that state and local government pension plans are underfunded by $3 trillion?
The GASB staff has also created a background document on the new pension standards for quick reference.