Changes to GASB pension reporting to impact employers in 2015

Changes are coming that could have a significant impact on how you report pension liabilities on your financial statements. These pension reporting changes are coming soon from the Governmental Accounting Standards Board (GASB).  GASB Statement No. 68 Letter | GASB Implementation Toolkit

GASB Statement No. 68 – Accounting and Financial Reporting for Pensions – Questions and Answers

Q: Who is impacted by GASB Statement No. 68?
A: GASB Statement No. 68 directly impacts GAAP basis (economic resources measurement focus and accrual basis of accounting) employers. Non-GAAP (regulatory, etc.) basis employers will be indirectly impacted as the Indiana State Board of Accounts (SBoA) will provide direction with what will be required to be included with your financial statements. Additionally, any employer may be subject to the audit of their payroll and census (birthday, sex, etc.) data by the Indiana Public Retirement System’s (INPRS) auditor, regardless of their basis of accounting.

Q: When is GASB Statement No. 68 effective?
A: GASB Statement No. 68 becomes effective for fiscal years beginning after June 15, 2014 and is an amendment to GASB Statement No. 27. For most employers in the state of Indiana, the requirements of GASB Statement No. 68 will be effective for fiscal year ends ending June 30, 2015 or December 31, 2015.

Q: Will GASB Statement No. 68 cause contribution rates to increase?
A: No. GASB Statement No. 68 does not impact the funding policies of pension plans.

Q: What are the primary requirements of GASB Statement No. 68?
A: GASB Statement No. 68 significantly changes the accounting and financial reporting regarding pension plans for GAAP basis employers. Some of the primary changes impacting GAAP basis employers are:

  • Employers are required to record their proportionate share of the net pension liability or asset in their financial statements.
  • Changes the calculation of the pension expense to be reported by employers and requires the recording of deferred inflows and outflows of resources in their financial statements.
  • Replaces many of the current note disclosures and required supplementary information to be provided in employer financial statements.

Q: How are employers to obtain the required information to be reported?
A: The Indiana Public Retirement System (INPRS) plans to prepare stand alone employer schedules of allocations and amounts, which should provide the required information by plan. The Indiana State Board of Accounts and INPRS plan to provide training and spreadsheets to assist employers. Details on how the stand alone employer schedules of allocations and amounts will be communicated are in process.

Q: Will the testing of payroll and census data required by the recent AICPA Whitepaper have any impact on employers (see Whitepaper here)?
A:  Potentially yes. The auditor of INPRS will select a sample of employers from each defined benefit plan to test the payroll and census data provided by employers to INPRS. Employers could be contacted to assist with the audits of their census data as early as May of this year.

Q: Where can employers obtain information about GASB Statement No. 68 and its implementation?
A:  GASB has an implementation toolkit here.

Q: Who do I contact with any questions?
A: If you have any questions, please contact our employer services group at (888) 876-2707 or