An Other Post-Employment Benefit (OPEB) plan is a plan that provides retirement benefits other than pensions – typically health, life, disability not covered by a pension plan, legal or other services. OPEB benefits are often used to encourage employment until retirement as they are usually not vested benefits and can be a way of defraying high medical costs or medical costs not otherwise covered by Medicare.
Other Post-Employment Benefit Plans (OPEB) With Watkins Ross
Rising healthcare costs make it more challenging for workers to retire since leaving employment often means losing healthcare coverage. Many employers have offered OPEB plans to employees as a way to continue to provide healthcare coverage during retirement – at least until Medicare eligibility.
The Financial Accounting Standards Board (FASB) – an accounting standard setting body for private employers – and the Government Accounting Standards Board (GASB) – the comparable body for public employers – have established rules for how employers must recognize the costs of these benefits for financial reporting purposes. These standards require actuarial calculations to determine financial liabilities associated with OPEB plans.
Recently, those same rising healthcare costs that make OPEB plans attractive to employees, however, have made it increasingly difficult – if not impossible – for OPEB plan sponsors to continue to provide that type of coverage. As a results, many OPEB plan sponsors are looking for ways to either lower their OPEB liability or eliminate it altogether.
Watkins Ross not only has the expertise required to determine your OPEB liability for financial reporting purposes but we also have experience and resources to assist you in identifying ways to manage those liabilities.