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Stmt. No. 68 Accounting and Financial Reporting for Pensions (GASB 68)

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.

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:

  • Establishing pension reporting standards for employers participating in public pension plans
  • Requiring employers to recognize their proportionate share of collective net pension liability on their financial statements
  • Establishing recognition of deferred inflows/outflows of resources depending on changes in the net pension liability
  • Providing a new definition of pension expense (or income)