GASB Adds Short-Term Project To Enhance Disclosure Requirements of Governmental Pension Plans; Board Will Also Concurrently Conduct Research Initiative to Assess Effectiveness of Existing Governmental Pension Accounting Standards.

NORWALK, Conn. -- The GASB today added a project to its current technical agenda that likely will require state and local governments to provide enhanced disclosures and supplementary information about their pension plans to users of governmental financial statements. The project, which is expected to be completed expeditiously, intends to bring current pension disclosure requirements for governments in line with those recently required for other post-employment benefits, or OPEB.

Separately, in accordance with the GASB's strategic plan, the Board is conducting a concurrent research project to determine the effectiveness of existing governmental accounting standards in this area. Based upon constituent feedback received during that research, the Board will then determine whether or not further changes to current governmental accounting standards for pensions are necessary.

"Both of these projects reflect the GASB's commitment to help ensure that users of governmental financial statements have access to the highest quality information available to make their decisions," said Robert Attmore, GASB Chairman. "While accounting standards do not and cannot require funding of such pension plans, the information they provide enhances constituent knowledge about how well these obligations are being met. Our short-term project intends to address certain shortfalls in pension disclosures that were first identified during the development of the OPEB standards, while our pension research project will better enable us to properly determine if even greater steps need to be taken."

Disclosure requirements previously adopted by the Board in regard to OPEB that potentially would be required for pensions as a result of as GASB's short-term project include:

1. Disclosure of the current funded status of the plan as of the
    most recent actuarial valuation date in the notes to the financial
    statements of pension plans and certain employers.

 2. Note disclosure of funded status and a multi-year schedule of
    funding progress using the entry age actuarial cost method as a
    surrogate when the aggregate actuarial cost method has been used
    to determine annual required contributions and annual pension
    cost.

 3. Additional note disclosures about actuarial methods and
    assumptions used in valuations on which reported information about
    the annual required contribution (ARC) and funded status of the
    plan is based.

 4. Disclosure by cost-sharing employees of how the contractually
    required contribution rate is determined.

 5. Presentation of the required schedules for a cost-sharing plan
    in which an employer participates in the employer's report, if the
    plan does not issue a GAAP-compliant report that includes required
    supplementary information (RSI) or the plan is not included in the
    financial report of another entity.

A formal exposure draft on this initiative is expected before the end of 2007.

About the Governmental Accounting Standards Board

The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board's diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its website www.gasb.org.