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OPEB Accounting – What’s Changing?

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OPEB Accounting - What's Changing?

GASB 45

GASB 74

GASB 75

Effective Date

Already in place

Fiscal Years Beginning
After June 15, 2016

Fiscal Years Beginning
After June 15, 2017

Actuarial Cost Method

Multiple Permissible
Actual Cost Methods

Entry Age Normal Cost Method Required

Valuation Date

Not More Than 24 Months Prior to the Beginning of the Biennial or Triennial Valuation Cycle

No More Than 24 Months Prior to Fiscal Year-End

No More Than 30 Months and 1 Day Prior to Fiscal Year-End

Valuation Frequency

Once Every 2 Years For Employers With More Than 200 Covered Participants. Once Every 3 Years For Employers With Less Than 200 Covered Participants.

Once Every 2 Years Regardless Of Size

Alternative Measurement Method

Available For Plans With Fewer Than 100 Participants

Discount Rate

Set By Actuary In Conjunction With The Plan Auditor

Single Equivalent Discount Rate: A Blended Rate Based On Plan Assets, Funding Policy and Investment Policy to the Extent That Plan Is Funded & A 20 Year Tax-Free Municipal Bond Index Rate For Unfunded Periods

Net OPEB Obligation (Total OPEB Liability)

Accrued Normal Cost & Amortization Payment Less Benefit Payments

Net OPEB Obligation Replaced By “Net OPEB Liability” (Total Current Liability Less Plan Assets) or the Unfunded OPEB Liability

Recognition of Changes in Liability

Changes Amortized In Gains/Losses Over A Period of 30 Years or Less

Investment Gains & Losses Are Phased In Over 5 Years While Changes In Liability Due to Experience & Assumption Changes Are Phased In Over The Average Remaining Lifetime of the Population

Implicit Subsidy

Community Rated Plans Not Required to Recognize An Implicit Subsidy

All Plan Types Must Recognize An Implicit Subsidy

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