The Governmental Accounting Standards Board (GASB) approved new standards that change the way governmental pension plans and their employers account for other post-employment benefits (OPEB), primarily health care, in a manner similar to the pension reporting standards of GASB 68.
The objective of GASB 75 is to increase the transparency and consistency of reporting financial information about post-employment benefits other than pensions. These standards must be applied to employer financial reports in fiscal years beginning after June 15, 2017. For most STRS Ohio employers, the standard applies to years ending June 30, 2018, and later.
What is required
GASB 75 requires employers to recognize their long-term obligation for OPEB benefits as a liability. Historically, GASB viewed an unfunded OPEB obligation as a future liability rather than as an existing one, allowing information about the total liability to be disclosed in the footnotes of your financial statements.
A shift to an accounting-based approach from a funding-based approach will now require employers to report their share of the unfunded liability of post-employment benefits other than pensions on their balance sheets for the fiscal year ending June 30, 2018, and later.
As an STRS Ohio employer, this means reporting your proportionate share of the net OPEB liability for retiree health care. Your share will be an allocation of the difference between the plans net assets and the total obligations to plan participants as of a specific measurement date. The standard only impacts financial reporting and does not impact the amount employers are required to fund under Ohio law.
How to prepare
The GASB Resources section of the STRS Ohio Employer Website has been updated to include information about GASB 75. Be sure to check the site regularly, as resources will be added as they become available. Relevant information will also be shared in future newsletters, eUPDATES and publications for individuals who prepare your financial statements.
In April 2018, allocation schedules with specific data needed to prepare your financial reports will be posted in Employer Self Service (ESS). You can access these schedules when available by logging in to ESS and clicking on "GASB Reports" on the home page.
If you have any questions about allocation schedules or implementing GASB 75, please email us or call the Employer Reporting Department toll-free at 888‑535‑4050. You may also need to contact your independent auditor or accountant to discuss the effect these changes will have on your internal accounting processes and annual audit.