Overview

Who is GASB ?

The Governmental Accounting Standards Board is responsible for developing standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports.

What is GASB45, and how can we help?

The Governmental Accounting Standards Board ( GASB ) issued statement No. 45, Accounting and Financial Reporting by Employers for Post Employment Benefits other than Pensions. These include retiree healthcare coverage subsidies and prescription benefits.

Statement 45 was issued to provide more complete, reliable, and decision-useful financial reporting regarding the costs and financial obligations that governments incur when they provide postemployment benefits other than pensions (OPEB) as part of the compensation for services rendered by their employees. Postemployment healthcare benefits, the most common form of OPEB, are a very significant financial commitment for many governments

The new standards should be implemented by employers in three phases based on a government`s total annual revenues in the first fiscal year ending after June 15, 1999: Phase 1 governments with total annual revenues of $100 million or more periods beginning after December 15, 2006 Phase 2 governments with total annual revenues of $10 million or more, but less than $100 million periods beginning after December 15, 2007 Phase 3 governments with total annual revenues of less than $10 million periods beginning after December 15, 2008.

To whom does GASB apply?

This new reporting requires employers to value post employment benefits using accrual accounting rather than a current obligation, pay-as-you-go approach. Implementation of the standard is required for fiscal years beginning after December 15, 2006, for governmental employers with total annual revenues of $100 million or more.

Why should we start analyzing these future obligations now?

By preparing early using our analysis tool, you can understand how the anticipated costs associated with your retiree benefit plans impact your future revenues, and begin to plan steps to better deal with that impact. These include creating alternatives and what-if scenarios using actuarial assumption data excluding certain categories of employees in anticipation of proposed changes in collective bargaining agreements.