United States

Changes to pension standards for certain governments


In 2012, the Governmental Accounting Standards Board (GASB) issued Statement 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, which revised and established new financial reporting requirements for most governments that provide their employees with pension benefits. During the implementation of this standard, concerns were raised by governments that participate in certain private or federally sponsored, multiple-employer defined benefit pension plans (such as Taft-Hartley plans and plans with similar characteristics) regarding the inability to obtain measurements and other relevant data points needed to comply with the requirements of the standard.

In response to these concerns, the GASB recently issued Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans. Statement 78 amends the scope and applicability of Statement 68 to exclude pensions provided to employees of state or local governmental employers through a cost-sharing multiple-employer defined benefit pension plan that (a) is not a state or local governmental pension plan, (b) is used to provide defined benefit pensions both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers, and (c) has no predominant state or local governmental employer (either individually or collectively with other state or local governmental employers that provide pensions through the pension plan). For employers that participate in pension plans meeting these criteria, Statement 78 establishes requirements for recognition and measurement of pension expense, expenditures and liabilities; note disclosures of descriptive information about the plan, benefit terms and contribution terms; and required supplementary information presenting required contribution amounts for the past 10 fiscal years.

Statement 78 is effective for reporting periods beginning after December 15, 2015. Earlier application is encouraged.