Certain stakeholder groups asserted that a delay is necessary until related auditing procedures have been implemented for a sufficient period. The concern was expressed that governments in multiple-employer pension plans will receive a modified audit opinion on their financial statements in the interim. However, GASB said, other individuals, organizations, and stakeholder groups wrote to the board requesting that the implementation date of Statement No. 68 not be changed. Some of these groups urged the GASB and other organizations to find a solution that does not involve a delay in implementation.
The board indicated that for its decision not to delay implementation of the new reporting standards, it considered:
- Delaying the new standards would not necessarily address the concern about a modified audit opinion. It appears, based on feedback received, that many governments would face a similar prospect of a modified audit opinion even if governments were to follow the previous pension standards.
- Pension plans are already well into the process of implementing the associated pronouncement, Statement No. 67, Financial Reporting for Pension Plans. If the implementation of Statement No. 68 were postponed, some governments would now incur the added cost of engaging an actuary to provide information under the old standards in addition to the information already obtained under the new standards.
- The financial statement users who provided feedback to the GASB expressed a strong preference not to delay Statement No. 68. These users understand the circumstances under which some governments may receive modified audit opinions. They stated that a clearly worded modification would not negatively impact their analyses of government finances.
- Concerns about the effort required to implement Statement No. 68, particularly with regard to governments in some cost-sharing multiple-employer pension plans, are real and significant. However, the board was fully aware of these issues when it originally considered the costs and benefits associated with establishing the original implementation date. No new evidence has been brought forth to date that would result in the reconsideration of this conclusion.
GASB approved Statement No. 68, as well as Statement No. 67, in June 2012 (see “GASB Approves New Pension Reporting Standards”). The requirements of Statement No. 68 are effective for periods beginning after June 15, 2014.
GASB has issued a guide designed to assist preparers and auditors of state and local government financial statements as they implement the statement (see “GASB Issues Guide for New Pension Standards”).