GASB Reporting Standard Changes
The Governmental Accounting Standards Board (GASB) has released two proposals for revised accounting and financial reporting standards for public pension plans.
The “exposure draft” for GASB Statement 25 would change the method public pension plans use to calculate and report the costs and obligations of the plans. This primarily affects KPERS directly.
The exposure draft for GASB Statement 27 would require governmental employers using GASB standards to report in their financial statements their share of the costs and obligations for the governmental pension plans provided to their employees. In Kansas, this only affects employers using Generally Accepted Accounting Principles (GAAP). Employers that do not use GAAP and GASB standards are not affected. Employers may want to consult their independent auditors if not certain.
Changes are expected to be effective for cost-sharing plans like KPERS for fiscal years beginning after June 21, 2013.
GASB suggests that the proposed standards will improve the pension fund disclosure process by increasing transparency and will increase the usefulness of the financial reports to users. It is important to note that these changes only affect the accounting standards and do not change funding related guidelines or practices.
KPERS is working with an actuarial firm and accounting consultants that specialize in governmental pensions to begin developing information for employers, keeping in mind that the exposure drafts are still drafts and we are early in the process.
While GASB is responsible for the standards, KPERS is here to provide support and information for employers. Employers are responsible for determining what applies to them for their financial statements and what accounting standards they use.
After reviewing your employer's accounting standards and the GASB information, e-mail KPERS as to whether your employer will use GAAP and need pension obligation information.
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