United States

GASB issues guidance addressing pension issues


The Governmental Accounting Standards Board (GASB) recently issued Statement No. 82, Pension Issues – an amendment of GASB Statements No. 67, No. 68, and No. 73, to address practice issues raised during the implementation of Statement No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. Specifically, Statement No. 82 addresses issues regarding:

  • Presentation of payroll-related measures in required supplementary information - Prior to the issuance of Statement No. 82, Statements Nos. 67 and 68 required presentation of covered-employee payroll, which is the payroll of employees that are provided with pensions through the pension plan, and ratios that use that measure, in schedules of required supplementary information. Statement No. 82 instead requires the presentation of covered payroll, defined as the payroll on which contributions to a pension plan are based, and ratios that use that measure.
  • Selection of assumptions and the treatment of deviations - Statement No. 82 clarifies that a deviation, as the term is used in Actuarial Standards of Practice issued by the Actuarial Standards Board, is not considered to be in conformity with the requirements of Statements Nos. 67, 68 or 73 for the selection of assumptions used in determining the total pension liability and related measures.
  • Classification of employer-paid member contributions - Statement No. 82 clarifies that payments made by an employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements should be classified as plan member contributions for purposes of Statement No. 67 and as employee contributions for purposes of Statement No. 68. It also requires that an employer’s expense and expenditures for those amounts be recognized in the period for which the contribution is assessed and classified in the same manner as the employer classifies similar compensation other than pensions (for example, as salaries and wages or as fringe benefits).

Statement No. 82 is effective for reporting periods beginning after June 15, 2016, except for the requirements for the selection of assumptions in a circumstance in which an employer’s pension liability is measured as of a date other than the employer’s most recent fiscal year-end. In that circumstance, the requirements for the selection of assumptions are effective for that employer in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. Earlier application is encouraged.