Proposed accounting guidance for Section 457 plans
FINANCIAL REPORTING INSIGHTS |
The Governmental Accounting Standards Board (GASB) recently issued an Exposure Draft, Internal Revenue Code Section 457 Deferred Compensation Plans That Meet the Definition of a Pension Plan and Supersession of GASB Statement 32. Per the proposal, if a Section 457 plan meets the definition of a pension plan, the appropriate GASB pension standards would be applied to the financial reporting for that plan and for the benefits provided through that plan.
Also, the proposal would require investments of all Section 457 plans to be valued as of the end of the plan’s reporting period in all circumstances, as is required for all other postemployment benefit plans. The proposal would supersede the remaining provisions of Statement 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, regarding investment valuation requirements for Section 457 plans.
If finalized, the proposed Statement would be effective for fiscal years beginning after December 15, 2020, and all reporting periods thereafter. Early application would be encouraged.
The proposal is available for comment until September 27, 2019.