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Federal Governmental Relations

GASB Toolkit

NCTR has prepared a “GASB Preliminary Views (PV) Employers Tool Kit.” It consists of a number of items specifically drafted (and reviewed by actuaries and others) to help employer representatives understand the basics of what GASB is proposing, and appreciate the drastic consequences if GASB’s PV becomes the new accounting and disclosure standard for governmental employers.  These items have been designed to simplify as best as possible the complicated issues in the PV, and focus on one of the most potentially dangerous, namely, the elimination of the “Annual Required Contribution” (ARC) and the inclusion of a new “Net Pension Liability,” or NPL, on the face of the employer’s balance sheet, thereby de-linking pension accounting from pension funding.

The Tool Kit items include the following:

• A one-page “IN A NUTSHELL” -- GASB PV FACT SHEET FOR EMPLOYERS
• A series of  FREQUENTLY ASKED QUESTIONS ABOUT GASB AND THE PV
• An explanation, with actual examples, of HOW GASB’S CHANGES WOULD AFFECT A PLAN SPONSOR’S BALANCE SHEET
• A “who, what, when, where, why, how” CALL TO ACTION
• A number of examples of POINTS TO CONSIDER INCLUDING IN EMPLOYER COMMENTS
• Copies of letters that other employers are considering

  Letter for Minnesota Employers Consideration - drafted by the Minnesota State Employees Retirement System, the Minnesota Public Employees Retirement Association, and the Minnesota Teachers Retirement Association

LINKS COMING SOON:

• Group Letter for Employers - Drafted by NCTR and NASRA
• NCTR/NASRA Group Letter to GASB on Preliminary View

OTHER RESOURCES:

There are a number of documents available if you want to get more “into the weeds’ concerning the GASB “Preliminary Views” (PV) Document.  Some suggested additional resources include:

• The NCTR Third Quarter 2010 Newsletter with a cover article by Paul Zorn, Director of Governmental Research with Gabriel, Roeder, Smith & Company, entitled “The GASB’s Proposed Changes to Pension Accounting and Financial Reporting by Employers.”
• An NCTR Federal E-News (June/July 2010) article on the GASB PV.
• A July 2010 Gabriel, Roeder, Smith & Company “Insight” newsletter on GASB’s Preliminary Views, with an excellent “Summary of Current GASB Pension Standards for Governmental Employers Compared with Proposed Changes Presented in the GASB’s Preliminary Views,” which can be found on page seven.
• An article by Paul Angelo, a senior vice president in The Segal Company’s San Francisco office, entitled “Proposed GASB Standards Would Alter the Meaning of Pension Expense.”    
• NASRA’s Standing Resolution 2010-2, amended in August, 2010, “Public Employee Retirement System Accounting Standards & Actuarial Methodologies.”
• An August 2010 Gabriel, Roeder, Smith & Company Research Memo, which applied several of the GASB PV’s key changes to a modeled public pension plan, based on a medium-sized statewide plan covering general employees. The GASB’s changes are applied as if they were applicable starting in 1983, and the resulting accounting measures are estimated based on the plan’s historical experience through 2009.
• The NCTR/NASRA joint letter to GASB on the PV, being currently circulated for signatures from retirement systems and members of boards of trustees.
• The GASB Preliminary Views “Plain-Language” Supplement.

NCTR Federal Legislative Contact:

Leigh Snell, Federal Relations Director
Phone:(540) 333-1015