Question

Does the new GASB statement 67 and 68 improve government pension reporting?

Answer 1

Yes it can improve government pension reporting.

Statement 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability.

Statement 67 provides disclosure requirement for both defined benefit and defined contribution pension plans. It also requires the presentation of new information about annual money-weighted rates of return in the notes.

Previously, GASB 25 and GASB 27, did not covered the reporting and measurement of plan liabilities and the information was not helpful. In previous standards, government did not report unfunded pension liabilities in the balance sheet, thus providing an inaccurate picture of governments’ true financial position.

Now the government has to report the unfunded pension liabilities which will give more accurate and transparent information about the liablities.

But still there are some confusions regarding measurement of pension obligations so these guidance also requires improvement.