GASB Issues Guidance on Multi-employer OPEB
Plans
June 29, 2009 (PLANSPONSOR.com) - The Governmental
Accounting Standards Board (GASB) has issued an exposure
draft of a proposed statement that addresses issues related
to the use of the alternative measurement method and the
frequency and timing of measurements by employers that
participate in agent multiple-employer other postemployment
benefit (OPEB) plans.
The proposed Statement would amend paragraphs 33 - 35 of
Statement No. 45, Accounting and Financial Reporting by
Employers for Postemployment Benefits Other Than Pensions,
to permit an agent employer that has an individual-employer
OPEB plan with fewer than 100 total plan members to use the
alternative measurement method, at its option, regardless
of the number of total plan members in the agent
multiple-employer OPEB plan in which it participates.
Statement 45 requires public employers to produce an
actuarial statement, using generally accepted accounting
standards, that presents the projected actuarial accrued
liabilities and the annual required contributions for
retiree health plans
The proposed Statement also would amend the requirement
of paragraph 33 of Statement No. 43, Financial Reporting
for Postemployment Benefit Plans Other Than Pension Plans,
that a defined benefit OPEB plan obtain an actuarial
valuation. The proposed amendment would permit the
requirement to be satisfied for an agent multiple-employer
OPEB plan by reporting an aggregation of results of
actuarial valuations of the individual-employer OPEB plans
or measurements resulting from use of the alternative
measurement method for individual-employer OPEB plans that
are eligible.
In addition, this proposed Statement clarifies that when
actuarially determined OPEB measures are reported by an
agent multiple-employer OPEB plan and its participating
employers, those measures should be determined as of a
common date and at a minimum frequency to satisfy the agent
multiple-employer OPEB plan's financial reporting
requirements.
The GASB explained that In agent multiple-employer
plans, separate liabilities are calculated and separate
asset accounts are kept for each participating government,
rather than being administered and accounted for as a
single plan as is done in a cost-sharing plan.
In its proposal the agency said that the guidance would
allow more agent employers to use the alternative
measurement method to produce actuarially based information
for purposes of financial reporting. The purpose of the
proposed change is to reduce the cost of compliance with
the requirements of Statement 45 for eligible agent
employers while achieving an appropriate balance between
the goals of reliable measurement of reported information
and reasonable cost.
The GASB also said the clarification that OPEB measures
reported by agent multiple-employer OPEB plans and their
participating employers should be determined at the same
minimum frequency and as of a common date will improve the
consistency of reporting with regard to funded status and
funding progress information.
The proposal can be viewed at
http://www.gasb.org/exp
. Comments on the proposal are due by August 28,
2009.
Rebecca Moore
editors@plansponsor.com