reporting pensions
DESCRIPTION
Reporting Pensions. Under GASB 68. Pension debt. Authority. GASB Statement 68 – Accounting and Financial Reporting for Pensions GASB 68 Implementation Guide Effective for fiscal year 2015. Presenters. Mark Whelan, CPA Chief Financial Officer, Kentucky Teachers’ Retirement System - PowerPoint PPT PresentationTRANSCRIPT
1KASBO - Spring 2014
Reporting PensionsUnder GASB 68
6/7/2014
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Authority• GASB Statement 68 – Accounting and
Financial Reporting for Pensions• GASB 68 Implementation Guide
Effective for fiscal year 2015
6/7/2014
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PresentersMark Whelan, CPAChief Financial Officer, Kentucky Teachers’ Retirement [email protected]
Todd Coleman, CPAController, Kentucky Retirement [email protected]
Susan Barkley, CPAAssistant Director, Kentucky Department of Education502.564.3930, ext [email protected]
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TerminologyOld New
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• Actuarial Accrued Liability (AAL)
• Unfunded Actuarial Accrued Liability (UAAL)
• Total Pension Liability (TPL)
• Net Pension Liability (NPL)
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Key Changes• The part of total pension liability not
covered by plan assets = net pension liability (NPL)
• NPL is a liability on entity-wide statements
• Changes in calculating NPL o Some components are expensedo Some are deferred outflows/inflows
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NPL
TPL – fair value of plan assets = NPL
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Actuarial Valuation• Actuarial valuation will contain:
o TPL o Components of change in NPLo Information needed for note disclosures
• Proportionate share determined by actuaries or retirement plan
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Changes in NPLMost will be an expense in the period of the change
o Service costo Interest on TPLo Benefit changeso Projected earnings
on pension plan investments
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Changes in NPL• Some components are deferred
outflow/inflow• Amortized over average of expected
remaining service liveso Difference between expected and actual performanceo Changes of assumptionso Change in proportionate shareo Difference between proportionate share of all
contributions and employer’s contributions
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Investment Earnings• Amortized over 5 years only• Report net deferred outflow/inflow
from this component
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Amortization• Must track each component
separately• Must track each year separately• Use the appropriate time period for
each
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CHANGE COMPONENT FOR NPL
EXPENSE DEFERRAL
Service cost Immediately NoneInterest on the TPL Immediately NoneProjected investment earnings Immediately NoneChanges in benefit terms Immediately NoneChanges in assumptions
Initial period amount
Expense over avg. remaining
service period of actives and inactives
Difference between assumed and actual economic and demographic factors
Difference between projected and actual earnings
Expense over 5 years
Other changes in NPL Immediately None
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Special Funding Situation
• Nonemployer contributing entity (state)• Legal requirement to contribute directly• Federal grants? No• Districts must record revenue and
expense equal to its proportionate share of state contributions – change in NPL
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Fund StatementsNothing changes due to GASB 68
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Entity-wide Statements
• NPL as a liability• On-behalf revenue for state
contributions• Deferred outflows/inflows amortized
(by function)• If the NPL change results in a net
credit, use expense anyway, not revenue
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Enterprise Funds• Full accrual basis• These funds show part of NPL and
other stuff on their statements, too
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To Get Started in FY 15
• Prior period adjustment on Statement of Activitieso Need beginning of year NPL (at 7/1/14)
Dr. Net position (beginning)Cr. Pension liability
• Beginning deferred outflow/inflow can be $0 first year
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Note Disclosures• Lots!• Descriptive information about the plan• Significant assumptions in TPL• Changes of assumptions• Pension expense• Deferred outflows/inflows by component
for this period and future periods• Proportionate share information
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RSI• 10-year schedules
o These build over time, can start FY 15 with one year
• Proportionate share• Covered payroll• Plan net position as % of TPL• Show state and district shares
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OPEB• Not included in scope of GASB 68• Will likely be addressed in a future
standard• Districts will have to record it
(amount paid for medical insurance fund)
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Our PlansKTRS CERS
6/7/2014
• Defined benefit• Cost-sharing multiple
employer plan• Special funding
situation• State will recognize
100% of NPL
• Note disclosures req’d
• Defined benefit• Cost-sharing multiple
employer plan• NO special funding
situation• Districts recognize
proportionate share of NPL
• Note disclosures req’d
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Looking Ahead• CERS info will come from KRS
actuarieso Expect a template to show proportionate share
info January 2015• Use the FY 14 actuarial valuation for
the district FY 15 financial statements
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