In June 2012, the Governmental Accounting Standards Board (GASB) issued two new accounting and financial reporting standards that substantially impact the reporting requirements for pension plans and employers participating in the plans. The purpose of the standards, according to GASB, is to improve the way state and local governments report their pension liabilities and expenses, resulting in a more realistic representation of the complete impact of pension obligations. GASB believes the changes will improve the decision-usefulness of the reported information and increase the transparency, consistency, and comparability of pension information across state and local governments.
GASB Statement No. 67, Financial Reporting for Pension Plans, replaces the requirements of Statement No. 25 and Statement No. 50, and was effective for fiscal periods beginning after June 15, 2013. The South Carolina Public Employee Benefit Authority (PEBA) implemented the changes required by this standard in the South Carolina Retirement Systems’ financial statements issued for the fiscal year ending June 30, 2014.
GASB Statement No. 68, Accounting and Financial Reporting for Pensions, replaces the requirements of Statement No. 27 and Statement No. 50, and is effective for fiscal periods beginning after June 15, 2014. This statement revises and establishes new financial reporting requirements for participating employers who issue financial statements based on generally accepted accounting principles (GAAP). If you are unsure about whether this will be applicable to you, please contact your auditor for additional guidance. GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date, was issued in November 2013, to provide clarification regarding deferred inflows and outflows under GASB 68 in the year of implementation.
The GASB statements will not affect retirement plan members or funding requirements for the plans. The new accounting rules will impact financial statement reporting for the South Carolina Retirement Systems and employers participating in the retirement plans.
Financial reporting and audit resources
PEBA has been working with its consulting actuary and external audit firm to ensure participating employers are provided with the information necessary to prepare their GAAP based financial statements in compliance with GASB 68 and GASB 71 starting with fiscal periods beginning on or after June 15, 2014.