Industry Insights

GASB Finalizes Guidance on Certain Cost-Sharing Pension Plans

January 2016

Executive Summary

On December 11, 2015, the Governmental Accounting Standards Board (GASB) finalized guidance to help certain governments meet the reporting requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27 (GASB 68). GASB Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans (GASB 78), addresses a practice issue associated with pensions provided through certain private or federally sponsored multiple-employer defined benefit pension plans, such as Taft-Hartley plans or plans with similar characteristics, and to state or local governmental employers for which employees are provided with such pensions.

GASB 78 narrows the scope of GASB 68 by excluding pensions provided to employees of state or local governmental employers through cost-sharing multiemployer defined benefit pension plans meeting certain criteria. For pensions meeting the criteria, the statement establishes, among other things:

  • Requirements for recognition and measurement of pension expense, expenditures and liabilities
  • Note disclosures
  • Required supplementary information presenting required contribution amounts for the past 10 fiscal years

The requirements apply to governmental financial statements presented in standalone financial reports as well as those included in the financial reports of another government. GASB 78 is effective for reporting periods beginning after December 15, 2015; earlier application is encouraged.


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