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The Governmental Accounting Standards Board (GASB) recently released Statements 74 and 75, which replace statements 43 and 45, respectively for reporting related to other postemployment benefits (OPEB) plans. The purpose of the update was to provide increased consistency and transparency about the information being reported for OPEB plans across entities.

For public employers who also sponsor defined benefit pension plans, the changes may seem familiar, as many of the updates reflect changes similar to those that were brought about by GASB 67 and 68 for reporting related to pension plans.

Summary of Key Changes

GASB table2

Additional Disclosure Requirements

  • Funded plans must disclose:
    • The annual money-weighted rate of return on plan investments
    • The plan’s long-term investment policy, earnings assumptions and current asset allocations
  • All plans must disclose:
    • A 10 year schedule showing components of the net OPEB liability, identifying sources of change in the liability
    • A statement of the fiduciary net position, including:
      • Assets
      • Liabilities
      • Deferred inflows/outflows
    • Sensitivities in the net OPEB liability to 1 percentage point increase and decrease in the:
      • Discount rate
      • Healthcare trend rate
    • Employers are encouraged to restate prior period financial statements based on new regulations or disclose justification for not restating

Questions?

If you have questions regarding the impacts of GASB Statements 74 and 75, you may contact Christian Veenstra, MAAA, EA at cveenstra@watkinsross.com or your plan’s auditor.

Blog authored by Kylie Young, ASA, Actuary.