GASB Statement No. 68, Accounting and Financial Reporting for Pensions
Long before the current economic downturn, the issue of public pensions and the viability of individual plans has been a much-debated topic; events since 2008 have only intensified the spotlight on this mounting problem. Management and those charged with governance have struggled to find solutions to the underfunding that many governmental plans face. Many of these plans are defined-benefit pension plans promising pre-determined monthly retirement benefits to employees, a costly practice that is rare in the private sector.
The Governmental Accounting Standards Board has been well aware of the rising tide of unfunded pension obligations, and in January 2006 the board added a new project on pension accounting and reporting to their research agenda. In April 2008, the GASB moved this project to its current agenda. The goal was to consider the possibility of improvements to the existing standards with a focus on improving the usefulness of information as well as the accountability and transparency in employer reporting of pension information.
After an arduous process, the GASB issued Statement 68 in June 2012. Statement 68 brings the governmental employer accounting and reporting standards closer in line with the private sector requirements.