The Governmental Accounting Standards Board has issued new guidance on its pension accounting standards to help state and local governments that participate in some private or federally sponsored multiple-employer defined benefit pension plans, such as Taft-Hartley plans and plans with similar characteristics.
During the implementation of a 2012 standard, GASB Statement No. 68, "Accounting and Financial Reporting for Pensions," stakeholders raised concerns to GASB about the inability of a small group of governments whose employees are provided pensions through such multiple-employer pension plans to obtain measurements and other relevant data points needed to comply with the requirements of the standard.
“This 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,” said GASB chairman David A. Vaudt in a statement. “It also promotes enhanced consistency among those applying the standards.”
The new guidance in GASB Statement No. 78, “Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans,” would help these governments by focusing the employer accounting and financial reporting requirements for those pension plans on obtainable information. Instead of the existing requirements under Statement 68, the new guidance establishes separate requirements for employers that participate in these pension plans.
Statement 78 establishes the criteria for identifying the applicable pension plans and addresses measurement and recognition of pension liabilities, expense, and expenditures; note disclosures of descriptive information about the plan, benefit terms, and contribution terms; and the required supplementary information presenting required contribution amounts for the past 10 fiscal years.
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