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New Public Pension Accounting Rules Set to Go into Effect for Governmental Employers

For employer fiscal years beginning after June 15, 2014, the new public pension accounting rules, issued in June 2012 by the Government Accounting Standards Board (GASB), will go into effect. It is important for pension plans and governmental employers that have not yet begun the process to become acquainted with the new standards and to initiate discussions that address key implementation issues.

Statement No. 67, Financial Reporting for Pension Plans, will replace Statement No. 25, Financial Reporting for Defined Contribution Plans. Statement No. 68, Accounting and Financial Reporting for Pensions, will replace Statement No. 27, Accounting for Pensions by State and Local Governmental Employers. The new statements will also replace Statement No. 50, Pension Disclosures.

The following areas have been identified by GASB as those that public officials and plan administrators should consider as they prepare for implementation:

  • Pension funding policy
  • Selection of assumptions
  • Timing of measurements
  • Timing of actuarial valuations
  • Development of information for employer reporting

The new standards introduced will result in significant changes in the type and form of information collected and reported by pension plans and governmental employers. Please note that the new standards only apply to accounting and financial reporting and will not affect funding or contribution requirements. The only thing that changes is where and how pension costs are accounted for in financial statements.

We have compiled a list of resources that may be useful to you as you prepare for implementation. If you have any questions, please contact your AHP team member directly.

GASB’s Pension Accounting and Financial Reporting page offers resources designed to enhance the understanding of Statements No. 67, Financial Reporting for Pension Plans, and No. 68, Accounting and Financial Reporting for Pensions.

GASB’s pension plan toolkit assists pension plans in implementation of Statement No. 67.

GASB’s pension implementation toolkit assists governments in implementation of Statement No. 68 and Statement No. 71.