The Governmental Accounting Standards Board (GASB) issued two new financial reporting standards in June 2015. The new standards, GASB 74 and 75, 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 67 and 68. The objectives of the standards are to:

  • Improve the usefulness of information about post-employment benefits other than pensions.
  • Improve accounting and financial reporting by state and local governments for other post-employment benefits.

GASB 74 — Impacts STRS Ohio

GASB 74 replaces statement 43 to improve the reporting by state and local pension plans, such as STRS Ohio. These standards apply to STRS Ohio’s Annual Comprehensive Financial Report beginning with the fiscal year ending June 30, 2017.

GASB 75 — Impacts Employers

GASB 75 replaces statement 45 and establishes accounting and financial reporting requirements related to governmental employers whose employees are provided with other post-employment benefits covered by GASB 74. For STRS Ohio employers, this includes the post-employment health care benefits provided by the plan and establishes standards for measuring and recognizing the related liability, expense, and deferred outflow and deferred inflow of resources.

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.

Contribution rates and funding requirements are not impacted by GASB 75. Under Ohio law, the State Teachers Retirement Board has the discretion to determine the portion of the employer contribution that is allocated to the Health Care Fund.

GASB 75 Requirements

  • Effective: Fiscal years ending June 30, 2018, and later
  • Replaces: GASB 45
  • Primary impact: STRS Ohio employers must report their proportionate share of STRS Ohio’s net liability and annual expense for other post-employment benefits (OPEB), primarily health care, in their financial statements.

STRS Ohio is a cost sharing multiple-employer plan. All STRS Ohio employers who prepare published financial statements on an accrual basis using generally accepted accounting principles (GAAP) are required to adhere to the standards of GASB 75.

GASB 75 requires employers to include a proportionate share of STRS Ohio’s net other post-employment benefits (OPEB) liability and annual expense in their financial statements for fiscal years ending June 30, 2018, and later. Employers are also required to include additional disclosures in the notes to their financial statements.

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 required supplemental information. A shift to an accounting-based approach from a funding-based approach now requires employers to report their share of the unfunded liability of the other post-employment benefits on their balance sheets.

STRS Ohio’s net OPEB liability is calculated as the difference between the plan’s net assets and the total obligations to plan participants as of a specific measurement date. The measurement date is a plan valuation date selected by the employer to report their share of the net OPEB liability in their financial statements.

Employers can choose a measurement date of June 30 of the prior or current fiscal year. The decision to use either prior or current fiscal year values is permanent and cannot be changed. For example, if an employer used prior fiscal year values for their 2018 financial statements, they must continue to use prior fiscal year values each year thereafter.

Note: The employer’s proportionate share of the net OPEB liability, expense, and deferred outflow and deferred inflow of resources may represent a significant impact on employer financial statements. The standards only impact financial reporting and do not impact the amount employers are required to fund under Ohio law. The State Teachers Retirement Board under Ohio statute will continue to determine the portion of employer contributions that will be allocated to the Health Care Fund.


Each year, STRS Ohio will prepare and provide audited schedules to assist employers with the preparation of their financial statements. These schedules will be available in Employer Self Service (ESS) approximately eight to nine months after the measurement date. View instructions for accessing GASB reports in ESS.

Compliance with GASB 75 requires additional effort on the part of STRS Ohio and each of its nearly 1,200 employers. It also requires coordination with the external auditors of STRS Ohio and its employers. STRS Ohio is committed to assisting all of our employers in understanding and implementing these standards, as well as communicating the information necessary for employer financial reporting.

Please email us if you have questions about the reports or the implementation. 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.