In June 2012, the Government Accounting Standards Board (GASB) issued two new standards that will substantially change the accounting and financial reporting of public employee pension plans and the state and local governments that participate in such plans. GASB Statement No. 67, Financial Reporting for Pension Plans
, revises existing guidance for the financial reports of most governmental pension plans. GASB Statement No. 68, Accounting and Financial Reporting for Pensions
, revises and establishes new financial reporting requirements for most governments that provide their employees with pension benefits. GASB Statement No. 67 is effective for financial statements for periods beginning after June 15, 2013. GASB Statement No. 68 is effective for financial statements for fiscal years beginning after June 15, 2014.
There are numerous accounting and auditing issues facing employers that participate in multiple-employer plans of which the State and Local Government Expert Panel (SLGEP) has been working very diligently to address. The GAQC has issued two whitepapers that address issues and suggested best practice solutions related to cost-sharing multiple-employer plans (cost-sharing plan) and the participating employers and the AICPA Auditing Standards Board has issued three related auditing interpretations. The GAQC has also issued a whitepaper that addresses issues and suggested best practice solutions related to agent multiple-employer plans (agent plans) as well as two related auditing interpretations. In trying to address the issues at hand, the SLGEP has had many discussions internally as well as with stakeholders including actuaries, plans, governmental employers, and even the GASB.
Whitepaper Released Relevant to Agent Plans, Participating Employers, and Auditors
With the implementation of GASB Statement No. 68, employers will be required to recognize a liability as employees earn their pension benefits (that is, as they provide services to the government). For the first time, employers participating in agent plans will recognize their specific pension amounts which include net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense. The SLGEP has addressed numerous issues from the employer and employer auditor perspective that arise from the change in accounting it its whitepaper titled, Governmental Employer Participation in Agent Multiple-Employer Plans: Issues Related to Information for Employer Reporting
. The whitepaper addresses issues related to how employers participating in agent plans obtain all necessary information to properly recognize and disclose pension amounts in their financial statements and how their auditors obtain sufficient appropriate evidence to support their opinions on employer financial statements. It should be of interest to agent plans, participating employers, and their auditors.