ISFIS partners with Aon Hewitt, a leading global provider of Human Resources solutions, to offer our GASB 45 Compliance Service. We are confident our complete valuation service is less expensive and easier to use than other providers, and for small districts we offer a low-cost best-in-class AMM (Alternative Measurement Method) Tool. To ensure timely completion of the GASB 45 requirements, sign up today by submitting a completed GASB 45 Compliance Service Participant Agreement. For more information contact Marissa Gaal.
What is GASB 45?
The Governmental Accounting Standards Board (GASB) issued Statement 45 in June 2004. GASB 45 is a financial reporting provision requiring government employers to measure and report liabilities associated with post employment benefits other than pensions. This measurement is referred to as an actuarial “valuation.” Other Post Employment Benefits (OPEB) may include retiree medical, drug, dental, vision, life, long-term disability, and long-term care benefits that are not associated with a pension. Government employers required to comply with GASB 45 include public schools, cities, states, and other government entities that offer OPEB and report under GASB. Valuations are required to include both early retirees and Medicare retirees if they are allowed to continue on the employer’s plan(s).
Initial Compliance Deadlines
Entities with over $100 million of revenue (Phase I) were required to comply with GASB 45 for periods beginning after December 15, 2006. Entities between $10 million and $100 million of revenue were required to comply for periods beginning after December 15, 2007 (Phase II). Entities under $10 million of revenue were required to comply for periods beginning after December 15, 2008 (Phase III).
Number of Members
Members include all active employees, terminated employees who have accumulated benefits but are not yet receiving them, retirees currently receiving benefits, surviving spouses if they are entitled to coverage, and eligible employees not actively participating.
Ongoing Compliance Deadlines & Valuation Options
Entities with 200 or more members must have a valuation performed every two years. Other entities must have a valuation every three years. In the “off years” between valuations, entities may use figures from the latest valuation. Most providers will include estimates for the “off year” amounts.
Entities with more than 100 members must have a full (standard) valuation. Entities with 100 or fewer members may use an Alternative Measurement Method (AMM). The ISFIS AMM Solution is available as low as $1100.
GASB 45 does not require entities to prefund, but does require these liabilities to be reported in their financial statements. The intent of GASB 45 is to focus increased attention on non-pension retiree benefits and the need to intelligently manage these costs.