For Educational Purposes Only

Transcription

1 This publication is intended for informational/educational purposes only and should not be used to replace the advice of a qualified professional. It is not intended to be a substitute for professional advice, whether actuarial, accounting, legal, or otherwise. While efforts are made to verify the information presented, PERA does not guarantee the accuracy or completeness of the information. PERA owns the rights to this publication and it may not be reproduced, republished, or re disseminated in any manner without the prior written consent of PERA. PERA cannot be held liable for any information provided in this publication. This publication is intended to help you understand how to take your PERA affiliated employer information from your Division Trust Fund's GASB 68 Schedule of Employer Allocation, Schedule of Collective Pension Amounts, and related notes and create journal entries to record the pension activity for your entity. The PERA Affiliated Employer shown in this example does not represent an actual employer, and it assumes that there is only one PERA Affiliated Employer Number for this financial reporting entity and that no further allocation is required. Furthermore, this publication doesn't include information pertaining to the journal entries to record employerpaid member contributions. If you have any questions, please contact the Colorado PERA GASB Work Team at GASBMail@copera.org. Page 1 of 7

2 PERA Affiliated Employer and Local Government Division Trust Fund Information NOTES/ ITEM A B C Pension Plan Financial Reporting Entity (PERA Affiliated Employer Number) Financial Reporting Entity (Financial Reporting Year End) Pension Plan Measurement Date Local Government Division Trust Fund XXX 6/30/ /31/2014 D E F G Collective Net Pension Liability as of 12/31/2013 adjusted for employer specific liability Collective Net Pension Liability as of 12/31/2014 Collective Deferred Outflow of Resources Excluding Employer Specific Amounts as of 12/31/2014 Collective Deferred Inflow of Resources Excluding Employer Specific Amounts as of 12/31/2014 $822,921,000 $896,309,000 $48,607,000 ($180,000) H Collective Pension Expense 2014 $93,680,000 I 2013 Employer Allocation Percentage % J 2014 Employer Allocation Percentage % K Average Expected Remaining Service Life for the Pension Plan for 2014 L Employer Contributions for 2014 (Jan through June) $45, M Employer Contributions for 2014 (July through Dec) $49,250 N O P Employer Contributions subsequent to the Pension Plan's Measurement Date of 12/31/2014 (Jan through June 2015) Total Collective Actual Contributions recognized by the Pension Plan for 2014 Total Collective Annualized Contributions used to determine Employer Proportionate Share for 2014 $47,100 $68,719,000 $69,481,000 Page 2 of 7

3 Sample Journal Entries for first year implementation of GASB Statement No. 68 and 71 DR CR Fund Balance (Equity) 1,144,876 Net Pension Liability 1,144,876 To record adjustment to opening balance for the Financial Reporting Entity's proportionate share of the Collective Net Pension Liability Calculation: D x I Deferred outflows of resources (dr. balance increases asset side of balance sheet) 45,700 Fund Balance (Equity) 45,700 To record adjustment to opening balance for the contributions made subsequent to the pension plan's prior year measurement date of 12/31/2013 Calculation: See Item "L" Information is sourced directly from the employer's payroll submissions for the period of January 2014 through June 2014 Deferred outflows of resources (dr. balance increases asset side of balance sheet) 66,424 Net Pension Liability 66,424 To record Financial Reporting Entity's proporationate share of Collective Deferred Outflows of Resources Calculation: F x J Net Pension Liability 246 Deferred inflows of resources (cr. balance increases liability side of the balance sheet) 246 To record Financial Reporting Entity's proporationate share of Collective Deferred Inflows of Resources Calculation: G x J Pension Expense 128,021 Net Pension Liability 128,021 To record Financial Reporting Entity's proporationate share of Collective Pension Expense Calculation: H x J (plus 2.00 for rounding) Net Pension Liability 20,305 Deferred inflows of resources (cr. balance increases liability side of the balance sheet) 20,305 To record Financial Reporting Entity's employer level deferral for change in employer allcoation percentage from 2013 through 2014 Calculation: D x (I J) Deferred inflows of resources (cr. balance increases liability side of the balance sheet) 8,945 Pension Expense 8,945 To record Financial Reporting Entity's first year amoritization of employer level deferral for change in employer allocation percentage from 2013 through 2014 Calculation: 20,305 / K Note: Calculations reference the note/items shown on page 2 Page 3 of 7

4 Sample Journal Entries for first year implementation of GASB Statement No. 68 and 71 DR CR Deferred outflows of resources (dr. balance increases asset side of balance sheet) 1,041 Net Pension Liability 1,041 To record Financial Reporting Entity's employer level deferral for the difference between actual contributions and a proportionate share of total contributions Calculation: (L + M) (J x O) Pension Expense 459 Deferred outflows of resources (dr. balance increases asset side of balance sheet) 459 To record Financial Reporting Entity's first year amoritization of employer level deferral for the difference between actual contributions and a proportionate share of total contributions Calculation: 1,041 / K Net Pension Liability 45,700 Deferred outflows of resources (dr. balance increases asset side of balance sheet) 45,700 To record the Financial Reporting Entity's employer contributions for the period of January 2014 through June 2014 as a reduction in the financial reporting entity's proportionate share of the collective net pension liability Calculation: See Item "L" Information is sourced directly from the employer's payroll submissions for the period of January 2014 through June 2014 Net Pension Liability 49,250 Cash 1 49,250 To record the Financial Reporting Entity's employer contributions for the period of July 2014 through December 2014 as a reduction in the Financial Reporting Entity's proportionate share of the collective net pension liability Calculation: See Item "M" Information is sourced directly from the employer's payroll submissions for the period of July 2014 through December 2014 Deferred outflows of resources (dr. balance increases asset side of balance sheet) 47,100 Cash 1 47,100 To record Financial Reporting Entity's employer contributions subsequent to the pension plan's Measurement Date of 12/31/2014 Calculation: See Item "N" Information is sourced directly from the employer's payroll submissions for the period of January 2015 through June The cash account is being credited for illustrative puposes only. It is possible the PERA Affilated employer has already recognized this activity in their general ledger according to their accounting policies that existed before the implementation of GASB Statement No. 68 and that an adjusting entry is required. Note: Calculations reference the note/items shown on page 2 Page 4 of 7

5 T Account Illustration Net Pension Liability 1,144,876 Note: The ending balance in the Net Pension Liability Account can be calculated two ways: (1) 1,144, , , , ,305-45,700-49,250 = $1,224,861 (2) 896,309,000 * = $1,224, ,424 20, ,021 45,700 1,041 49,250 1,224,861 Proportionate share of Proportionate share of collective deferred outflows of collective deferred inflows of resources related to pensions resources related to pensions , ,021 66, ,021 Employer level deferred outflows of resources related to Employer level deferred inflows pensions of resources related to pensions 45, ,945 20,305 1, ,945 47,100 45,700 47,682 11,360 8,486 Cash Fund Balance (Equity) ,250 1,144,876 47,100 45,700 Proportionate share of collective pension expense Pension expense amortization of employer level deferrals 96,350 1,099,176 Page 5 of 7

6 Note Publication which contains information for this item A B C D E F G H I J K L Amounts and December 31, 2013 (Note 1) See sample employer footnote disclosures Amounts (Note 6) Schedule of Collective Pension Amounts as of December 31, 2013 Amounts December 31, 2013 (Note 7) Amounts (Note 7) Amounts (Note 11) Amounts (Note 12) Amounts (Note 15) Schedule of Employer Allocations as of and for the year ended 2013 Employer Payroll Reconciliations for 2013 (File is in Excel Format) Employer Payroll Reconciliations for 2014 (File is in Excel Format) Amounts (Note 14) Information is sourced directly from the Employer's Payroll Submissions Employer Payroll Reconciliations for 2014 (File is in Excel Format) Notes to Sample Publication PERA Educational Video which contains information on this item Types of Pension Plans Overview of GASB Pension Statements for Cost Sharing Plans Measurement Date vs. Reporting Date Calculating the Collective Net Pension Liability Determination of a Discount Rate Calculating the Collective Net Pension Liability Determination of a Discount Rate Collective Deferrals A Smoothing Mechanism Collective Deferrals A Smoothing Mechanism Collective Pension Expense Collective Deferrals A Smoothing Mechanism Employer Level Deferrals and Pension Expense M Information is sourced directly from the Employer's Payroll Submissions Employer Payroll Reconciliations for 2014 (File is in Excel Format) Page 6 of 7

7 Notes to Sample Publication Note Publication which contains information for this item PERA Educational Video which contains information on this item N Information is sourced directly from the Employer's Payroll Submissions Employer Level Deferrals and Pension Expense O P Amounts (Note 5) Amounts (Note 5) Employer Level Deferrals and Pension Expense Employer Level Deferrals and Pension Expense Note: The publications referenced above are available on STARS which is a secured website used by PERA Affiliated Employers. Please visit reporting standards/employer schedule status to see a complete listing of items that were provided to PERA Affiliated Employers. External auditors will need to contact their clients to obtain these publications. Page 7 of 7