April 21, 2016

GASB Issues Guidance on Pension Issues Raised During Implementation of its Standards for State and Local Government Pensions

On April 11, 2016, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 82, Pension Issues. Statement No. 82 addresses issues raised by stakeholders during the implementation of GASB’s accounting and financial reporting standards for state and local governments: Statements No. 67, No. 68 and No. 73.*

Statement No. 82, which amends those statements and is generally effective for reporting periods beginning June 15, 2016, addresses issues regarding:

  • The presentation of payroll-related measures in required supplementary information. The measure of payroll that is required to be presented in schedules of required supplementary information (and used in ratios that are presented in required supplementary information) should be covered payroll. Covered payroll is the payroll on which contributions to a pension plan are based. Prior to the issuance of Statement 82, presentation of covered-employee payroll was required, which might include pay elements that are not included in pay for purposes of determining pension benefits or contributions. This change addresses the practical barrier to pension plans that typically only receive payroll on which pension benefits and contributions are based.
  • The selection of assumptions and the treatment of deviations from the guidance in Actuarial Standards of Practice for financial reporting purposes. Statement 82 clarifies that a deviation, as the term is used in Actuarial Standards of Practice issued by the Actuarial Standards Board, from the guidance in an Actuarial Standard of Practice should not be considered to be in conformity with Statements 67, 68 or 73.
  • The classification of employer-paid member contributions. For purposes of applying Statement 67, Statement 82 clarifies that the payment by the employer to satisfy contributions that are identified by the pension plan terms as plan member contributions should be classified as plan member contributions. For purposes of applying Statement 68 (including determining a cost-sharing employer’s proportion) these amounts should be classified as employee contributions. Statement 82 also requires that an employer’s expense and expenditures for those amounts be recognized in the period for which the contribution is assessed and classified in the same manner as the employer classifies similar compensation other than pensions (for example, as salaries and wages or as fringe benefits).


* The title of Statement No. 67 is Financial Reporting for Pension Plans. The title of Statement No. 68 is Accounting and Financial Reporting for Pensions. Statement No. 73 has an exceptionally long title: Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.

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Kim Nicholl

Kim Nicholl

SVP, National Public Sector Retirement Practice Leader