GASB 68 Nuts and Bolts

Transcription

1 GASB 68 Nuts and Bolts Paul Niedermuller, CPA, Principal cliftonlarsonallen.com

2 Learning Objectives/Agenda Information from plan now WHAT? Impact of Measurement Date & Coordination with Auditors Accounting and Audit Issues updated with additional guidance Financial statements after implementation 2

3 Say What I have to do what with this and when. How information can be reported to employers Year one implementation and beyond 3

4 Why the Change? 4

5 5

6 GASB Pension Standards Standard # Title Effective Date GASB 67 GASB 68 Financial Reporting for Pension Plans Accounting and Financial Reporting for Pensions Fiscal Years beginning after June 15, 2013 Fiscal years beginning after June 15,

7 Impact of Measurement date and coordination with auditors 7

8 Timing of Measurement of Total Pension Liability Pension Expense (measurement period) Deferred Outflows of Resources Plan Prior Year-End Employer Prior Year- End Plan Current Year-End Employer Current Year-End Measurement Date June 2014 December 2014 June 2015 December 2015 Measurement date will most likely correspond to year-end of plan. Employer contributions made directly by the employer subsequent to the measurement date of the net pension liability and before the end of the employer s fiscal year should be recognized as a deferred outflow of resources. 8

9 Example Public University Public University participates in a cost-sharing multiple-employer definedbenefit plan sponsored by the State of Example. Public University is implementing GASB Statement 68 during the year ended June 30, The cost-sharing plan also has a fiscal year-end of June 30th and implemented the provisions of GASB Statement 67 during the year ended June 30, Public University s financial statements are a single-year presentation. In accordance with GASB Statement 68, the measurement date for Public University must be as of a date no earlier than the end of its prior fiscal year. Since Public University and the Plan have the same year end, Public University may elect to use June 30, 2014 or June 30, 2015 as the measurement date. However, once selected, the measurement date should be consistently applied from period to period. 9

10 Example Public University Impact of Using Prior Year Measurement Date Pension Expense (measurement period) Deferred Outflows of Resources Employer Prior Year- End Employer Current Year-End Plan Year-End Plan Year- End Measurement Date June 2013 June 2014 June

11 Example Public University Impact of Using Current Year Measurement Date Pension Expense (measurement period) University Prior Year- End University Current Year-End Plan Year-End Plan Year- End Plan Year- End Measurement Date June 2013 June 2014 June

12 Considerations for Measurement Date Potential for multiple measurement dates for entities within the same reporting entity Information included in CAFR for pension plans reported as fiduciary funds Timeliness of information available from pension plans Impact on precision of recorded amounts Significance of changes since measurement date 12

13 Recognition of Changes in NPL Service cost Change in the NPL Expense Deferred Outflow or Inflow of Resources Interest on TPL Plan Changes TPL-related differences between expected and actual experience TPL-related changes in assumptions Contributions subsequent to the measurement date X X X Single-Period Piece Single-Period Piece X X X 13

14 Recognition of Changes in NPL (cont) 14

15 Example Schedule of Employer Pension Amounts EXAMPLE COST SHARING PENSION PLAN Schedule of Pension Amounts December 31, 2014 Deferred Outflow of Resources Deferred Inflows of Resources Pension Expens Changes in Changes in Net Employer Employer Amortization Proportion Proportion of Deferred and Differences and Differences Amounts from Differences Differences Between Differences Differences Between Changes in Between Between Contributions Between Between Contributions Proportionate Propotion and Employer/ Expected Projected and Proportionate Expected Actual and and Proportionate Share of Proportionate Nonmployer and Actual and Actual Share of and Actual Projected Share of Plan Share of (special funding Net Pension Economic Investment Changes of Pension Economic Investment Changes of Pension Pension Pension situation) Liability Experience Earnings Assumptions Expense Experience Earnings Assumptions Expense Expense Expense State of Example $ 38,589, ,768 2,058,088 1,500, , ,371 1,063, ,365 1,878,717 12,375 Employer 1 4,831,647 53, , ,898 96,633 47, , , ,229 (1,793) Employer 2 5,798,553 64, , , ,971 57, , , ,303 (8,088) Employer 3 8,698,585 96, , , ,972 85, , , ,492 3,021 Employer 4 11,396, , , , , , , , ,828 (9,900) Employer 5 2,597,183 28, , ,002 51,944 25,600 71,563 42, , Employer 6 1,716,569 19,073 91,550 66,756 34,331 16,920 47,298 24,325 83, Employer 7 1,696,283 18,848 90,468 65,967 33,926 16,720 46, ,325 82,584 (5,712) Employer 8 14,316, , , , , , , , ,004 8,405 Employer 9 4,814,421 53, , ,228 68,325 47, ,657 87, ,391 (1,188) Employer 10 4,808,301 53, , ,990 67,528 47, ,488 41, ,093 1,656 Total $ 99,263,485 1,102,928 5,294,055 3,860,249 1,939, ,435 2,735,105 1,939,406 4,832,655 15

16 Recording the Entry to Book NPL Net position prior period adjustment of $12,532,889 DO/DI/pension expense from the plan information 16

17 Employer SONP 17

18 Footnote Disclosure Deferrals 18

19 Employer Action Items How are bond raters going to interpret the liability? Who will keep track of the amortization schedules for the employers? Allocation of pension liability between employer Methodology and equity between opinion units How to account for differences between the information provided in the Plan CAFR and the latest actuarial valuation. Which information will the employers select for their financial statements? 19

20 Thank You 20