About the New Standards
Governmental Accounting Standards Board (GASB) has issued
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans and
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Statement 74 which is effective beginning with fiscal years ended June 30, 2017 supersedes Statement 43,
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. It is important to note that units that do not have assets set aside in a GASB defined trust do not have anything to implement with GASB Statement 74. Statement 45,
Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, will be replaced by Statement 75 which is effective beginning with fiscal years ending June 30, 2018. Statement 75 should be implemented by all units that provide postemployment benefits other than pensions to their employees.
These statements apply to postemployment benefits other than pensions, the most common being health, dental, vision, and life insurance benefits for retirees. These standards will change the way plans and employers report and disclose information relating to Other Postemployment Benefits (OPEB) arrangements. The intent of the standards is to improve the usefulness of the reporting information and increase transparency. As with the pension standards issued earlier, it is important to remember that the standards focus on accounting for the costs and obligations of OPEB and avoid establishing guidance on funding.
Unlike with the pension standards, most of these OPEB arrangements will be single-employer plans that are owned by the employer. Thus, the employer will bear most of the responsibility for the information and reporting for these single-employer plans. An actuarial valuation will be necessary to provide the financial information needed to properly comply with the two standards; for any single-employer plans, the responsibility of obtaining this will rest on the shoulders of the plans and employers.
North Carolina offers two cost-sharing, multiple-employer, defined-benefit plans that are available to select employers in the State:
• State Health Plan retiree benefits are provided through the Retiree Health Benefit Fund (RHBF)
• Disability Income Plan of North Carolina (DIPNC)
Participants in either of these plans will receive any information necessary to comply with the reporting requirements of these standards from the State.
North Carolina Department of State Treasurer will continue to provide guidance and assistance to units affected by these standards.
Alternative Measurement Method
(An option for units with less than 100 plan members)
||Information and resources to facilitate the understanding and implementation of GASB 74 and GASB 75
Ancillary Governmental Participant Investment Program (AGPIP)
- North Carolina Department of State Treasurer investment program for OPEB and LEOSSA funds. Includes template trust agreement and board resolution.