The International Public Sector Accounting Standards Board released for public comment an
The goal is to increase the transparency and accountability of public sector entities when it comes to the measurement and recognition of retirement plan obligations, which can represent a significant liability for the public sector and are often omitted from the financial statements of a consolidated entity. The IPSASB decided it was important to develop an international standard to fill this gap and require retirement plans to provide a complete picture of public sector retirement obligations.
While multiemployer retirement plans might seem to be more common in the private sector, public sector labor unions often strike bargains with a variety of state and local governments. In the U.S., the Governmental Accounting Standards Board already has set standards for pension plans for state and local governments in
“Retirement benefit obligations can represent a significant but often hidden liability for the public sector,” said IPSASB chair Ian Carruthers in a statement Friday. “The draft standard requires public sector employee retirement benefit plans to provide a complete view of their financial activities, assets and obligations. This increased transparency is intended to result in stronger public financial management and better-informed decision-making.”
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