Industry Insights

GASB Proposes OPEB (Statement 75) Implementation Guidance

August 2017

In June, the Governmental Accounting Standards Board (GASB) proposed guidance to address issues raised or anticipated about implementing Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, as amended. The exposure draft contains more than 500 questions and answers to help preparers of state and local government financial statements comply with the new other postemployment benefits (OPEB) accounting and reporting requirements.

The proposed Implementation Guide also includes questions and answers applicable to single-employer and cost-sharing, multiple-employer OPEB plan reporting to address total OPEB liability measurement issues identified subsequent to the issuance of Implementation Guide No. 2017-2, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans (Statement 74 implementation guidance), issued in April 2017.

The questions and answers cover the following topics, plan types and situations:

  • Scope, applicability, effective date and transition of Statement 75, as amended
  • Types of OPEB
  • Types of defined benefit OPEB plans and employers
  • Special funding situations
  • Defined benefit OPEB other than insured benefits
  • OPEB provided through OPEB plans not administered through trusts that meet the criteria in paragraph 4 of Statement 75
  • Alternative measurement method
  • Defined contribution OPEB

Implementation guidance is authoritative category B guidance. Governments are encouraged to read the proposal to ensure their implementation concerns are addressed in full and respond to GASB by the comment deadline of September 25, 2017. Statement 75, as amended, is effective for financial statements for fiscal years beginning after June 15, 2017.

Four nonauthoritative illustrations also are presented to demonstrate:

  • Determination of benefit payments if blended premium rates are stated
  • Determination of the discount rate in circumstances in which the employer pays benefits with its own resources as they come due, and the OPEB plan is administered through a trust that meets the criteria in paragraph 4 of Statement 75
  • Determination of certain amounts to be presented in a single or agent employer’s required supplementary information (RSI) schedule of contribution-related information
  • Note disclosures, RSI and calculation of certain recognized amounts for a cost-sharing employer

With limited exception, the requirements of the proposed Implementation Guide would be effective for reporting periods beginning after June 15, 2017. Earlier application will be encouraged. Changes adopted to conform to the Implementation Guide would be retroactively applied by restating financial statements, if practical, for all periods presented.

For more information, contact your BKD advisor.

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