Business Insurance reports that public pension plans will be required to highlight net unfunded liabilities on their balance sheets and will have less time to expense them under the draft rules.
The rules also would require underfunded public plans to use a more conservative 30-year municipal bond index rate, and cost-sharing plans would be subject to full accounting for the first time instead of simply included in the combined statements, Business Insurance said.
Funds would have to expense their unfunded liabilities immediately for inactive workers’ costs and would face a new amortization period for active workers based on their average remaining service life. Currently, funds have up to 30 years to account for actuarial gains and losses.
The board will offer a comment period until September 30 and will hold three public hearings this fall in New York, Chicago, and San Francisco.
According to the news report, final rules are expected out by July 2012. Single-employer plans with $1 billion or more in assets will adopt them first, and other plans will have another year to do so. GASB will offer a “plain language” supplement, illustrations ,and a 10-year implementation schedule on its Web site later Friday.
In anticipation of the proposed rules, the National Association of State Retirement Administrators and the National Council on Teacher Retirement issued a statement noting concerns (see Groups Express Concern over New Pension Accounting Rules).The publications will be posted to http://www.gasb.org.
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