GASB project Update for employers

GASB 68 and GASB 75 information now available

The data necessary for employers to comply with the GASB 68 and 75 standards affecting accrual basis employers is now available to employers via the secure Employer Contribution System.

An Employer Notice was sent in June 2015 with instructions on how to add the “Online GASB Report” role to users who need to access this information. The assigned users can access the OPERS GASB 68 information by clicking on the “GASB Reports” button on the ECS home page.

An Employer Notice was sent in June 2015 with instructions on how to add the “Online GASB Report” role to users who need to access this information. The assigned users can access the OPERS GASB 68 and 75 information by clicking on the “GASB Reports” button on the ECS home page.

GASB educational and outreach materials

GASB FAQ

Frequently Asked Questions have been updated to include additional GASB 75 topics.

Learn More: GASB FAQ

Talking points for stakeholders

OPERS partnered with stakeholders and employers to ensure the impact of the Governmental Accounting Standards Board, or GASB, pension standards (GASB 67 and 68), and the initial implementation of the standards were understood. OPERS implemented the new health care standard, GASB 74, in the 2017 Comprehensive Annual Financial Report. Most employers will implement GASB 75 in their 2018 reports. Refer to the below support materials for additional information.

Resources for stakeholders:

Contact us with questions

For questions, please emails us at employeroutreach@opers.org.

GASB 68 and 75 Background

In June 2012, GASB, issued two standards changing the accounting and financial reporting requirements for pensions.

In 2015, GASB also issued two standards changing the accounting and financial reporting requirements for Other Post Employment Benefits, or OPEB, also referred to as OPERS health care.

The intent of the standards is to enhance the pension-related and OPEB-related information in financial reports by providing greater transparency and standardizing the valuation practices from entity to entity. The standards require separate accounting and financial reporting for the pension system and requires employers to recognize a net pension liability and net OPEB liability on their financial statements. These are accounting and financial reporting standards and do not affect funding requirements.

Why the change?

From the GASB perspective, pension benefits and OPEB are a component of the compensation package and employment relationship between the employer and employee. Therefore, to the extent the pension system is not 100 percent funded, under these standards employers have to report liabilities for the unfunded portion of the pension benefits and OPEB earned by employees.

Under Ohio law, the current employer funding requirement is the statutorily required contributions. While GASB requires employers to present these unfunded liabilities on financial statements, the employer’s responsibility is to remit the statutory contributions.

How OPERS approached the implementation

We recognized the impact pension standard requirements would have on employers. Before the Governmental Accounting Standards Board issued implementation guides, OPERS staff worked closely with employers to perform a test implementation involving a cross section of employers. As a result of the test implementation, we were able to:

Identify required disclosure elements for both OPERS and employers
Develop a specific and sustainable way to allocate the proportionate pension liability share to each employer entity

OPERS’ work with the employer test group resulted in pro forma financial statements and disclosures compiled by the test group using the data provided. With that information, OPERS developed educational and outreach materials for a broad-based implementation of the pension standards for all impacted employer entities. This included two comprehensive recorded pension presentations: the executive track presented a high-level overview of the standards and the operations track presented an overview of the standards, requirements and what to expect from OPERS. Also included were technical details, employer responsibilities, example calculations and journal entries for employers.

Throughout 2014 and 2015, OPERS continued to partner with employers and stakeholders to deliver education on the new standards. We also worked extensively with our external auditors and the state auditor’s office to finalize and execute audit procedures over the GASB 67 and 68 information, including testing of census data at almost 100 employers. We continued to partner with the Public Pension Financial Forum to advocate for reasonable audit requirements as the American Institute of Certified Public Accountants finalized the Audit and Accounting Guide for State and Local Governments.

The OPEB standards (GASB 74 and 75) closely mirror pension standards. OPERS participated in the GASB field test of OPEB standards and testified before the GASB in an attempt to limit requirements for OPEB due to the discretionary nature of health care. In the end, GASB statements for OPEB were a reflection of the pension standards.

OPERS performed an internal mock implementation of the OPEB standards to identify anomalies that could affect the retirement system and employer reporting. We were able to utilize lessons learned with the pension implementation to implement the OPEB standards and adapted the core pension reporting templates to the OPEB reporting requirements.

OPERS Commitment

OPERS did not create these standards. We worked hard to positively influence the standards through direct interactions with GASB’s officials during both the comment period prior to the finalization of the standards and during our test implementation.

We collaborated with employers by making available the information necessary for compliance – a shared responsibility. OPERS was a national leader in the testing and implementation of these standards.