As local governments implement the new pension accounting standards issued by the Governmental Accounting Standards Board, GASB Chairman David Vaudt said in a recent webcast that plan administrators and governments need to focus on five key areas for successful implementation:
2. Selection of assumptions
3. Timing of measurements
4. Frequency of timing of actuarial valuations
5. Employer reporting information
Vaudt reminded listeners that the direct link between measurement for funding purposes and measurement for pension expense purposes has been removed in the new standards: GASB Statement No. 68, Accounting and Financial Reporting for Pensions, which is effective for governments for fiscal years beginning after June 15, 2014. Statement No. 67, Financial Reporting for Pension Plans, which addresses reporting by pension plans that administer benefits for governments, takes effect for financial statements for periods beginning after June 15, 2013. Click here for more information about the GASB webcast.
PENSION PLAN EXAMPLES
Some pension plans have remained better funded than others in the aftermath of the economic downturn. Here are three well-funded pension plans and their characteristics.
- City of Kalamazoo, Michigan Employees’ Retirement System
- Illinois Municipal Retirement Fund
- Denver Employees Retirement Plan
Also the Milwaukee public pension fund was recently highlighted on NPR during an interview with Elizabeth Kellar, president and CEO of the Center for State and Local Government Excellence. Click here to hear the interview and report.
PENSION FUNDING POLICY
MORE INFORMATION
2014 Facts: State and Municipal Bankruptcy, Municipal Bonds, and State and Local Pension (February 2014).
Are City Fiscal Woes Widespread? Are Pensions the Cause (December 2013) by the Center for State and Local Government Excellence.
The GASB new online toolkit
For more in depth research on pension funding, The Funding of State and Local Pensions: 2013-2017 by the Center for State and Local Government Excellence.
The Public Pension Update by Wells Fargo
The GRS Insight: The GASB's New Pension Accounting and Financial Reporting Standards.
Evolving Role of Defined Contribution Plans in the Public Sector which looks at how changes to the public sector defined benefit plans may impact the role defined contribution plans play in promoting retirement security, written by the Center for State and Local Government Excellence.
