GASB 45 – upcoming changes
With the upcoming pension accounting changes under GASB 67/68, I wanted to make sure you’re abreast of what’s happening on the OPEB front (GASB 45). As you may be aware, GASB has been working on an OPEB project since 2011 and issued an exposure draft in May 2014 to harmonize the accounting practices between pension & OPEB. On May 28th, GASB announced that they’ll be revewing final “ballot” drafts at their June meeting and we are still on track for an FY 18 effective date.
What does this mean to you?
This new standard will mirror GASB 68 in many ways and is meant to encourage funding of OPEB liabilities through improved disclosure and forcing the use of lower interest rates for those who do not fund. As such, the disclosed liabilities for many Towns, Schools and Enterprise Funds will dramatically increase absent changes in funding policy.
What can you do?
Now is the time to begin reviewing your plan liabilities along with your funding strategy & approach. What works for one entity doesn’t necessarily work for others – you need to find a solution that you can actually implement.
Can I get more info?
As the new OPEB Standard hasn’t yet been released, we can’t provide “formal” guidance. With that said, the DRAFT statement largely mirrors GASB 68. You may find our GASB 68 FAQ to be of value to help you understand how this will impact your OPEB plan.
As the largest provider of OPEB services in the State of Massachusetts, we’re here to help if you have questions or need more information.