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Statement No. 68 Accounting and Financial Reporting for Pensions (GASB 68) and Amendments
In June 2012, GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions, to improve the financial reporting of retirement systems’ contributing employers. The intent of the standard is to enhance the pension related information in financial reports to provide greater transparency and standardize the valuation practices of public retirement systems and associated employers. Basically, the new standard requires employers to recognize a net pension liability on their financial statements. Employers can find their net pension liability from the LSERS Employer Pension Report.
Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, is an amendment to GASB 68 addressing employer contributions to a defined benefit pension plan after the measurement date.
Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that Are Not Within the Scope of GASB 68, any assets accumulated for pensions that are provided through pension plans that are not administered through trusts that meet the criteria specified in Statement 68 should not be considered pension plan assets.
Statement No. 82, Pension Issues – An Amendment of GASB Statements No. 67, 68, and No. 73. This amendment clarifies the term, covered payroll, which is the payroll on which contributions are based. In addition, this statement clarifies that payments made by an employer to satisfy contribution requirements should be classified as employee contributions. The employers’ expense should be recognized in the period in which the contribution is assessed.
Overview
GASB 68 is effective for LSERS participating employers for the Fiscal Year beginning after June 15, 2014. GASB 68 replaces Stmt. No. 27, Accounting for Pensions by State and Local Governments and Stmt. No. 50, Pension Disclosures. The key implications for LSERS employers resulting from GASB 68 are as follows: