7.1. SR 02-19-2008 - Laserfiche WebLink

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Summary of Statement No. 45 . Recognize the cost of benefits in periods when the related services are received by the employer . Provide information about the actuarial accrued liabilities for promised benefits associated with past services and whether and to what extent those benefits have been funded Provide information useful in assessing potential demands on the employer's future cash flows. This Statement improves the relevance and usefulness of financial reporting by (a) requiring systematic, accrual-basis measurement and recognition of OPEB cost (expense) over a period that approximates employees' years of service and (b) providing information about actuarial accrued liabilities associated with OPEB and whether and to what extent progress is being made in funding the plan. Summary of Standards Measurement (the Parameters) Employers that participate in single-employer or agent multiple- employerdefined benefit OPEB plans (sole and agent employers) are required to measure and disclose an amount for annual OPEB cost on the accrual basis of accounting. Annual OPEB cost is equal to the employer's annual required contribution to the plan (ARC), with certain adjustments if the employer has a net OPEB obligation for past under- or overcontributions. The ARC is defined as the employer's required contributions for the year, calculated in accordance with certain parameters, and includes (a) the normal cost for the year and (b) a component for amortization of the total unfunded actuarial accrued liabilities (or funding excess) of the plan over a period not to exceed thirty years. The parameters include requirements for the frequency and timing of actuarial valuations as well as for the actuarial methods and assumptions that are acceptable for financial reporting. If the methods and assumptions used in determining a plan's funding requirements meet the parameters, the same methods and assumptions are required for financial reporting by both a plan and its participating employer(s). However, if a plan's method of financing does not meet the parameters (for example, the plan is financed on apay-as-you-go basis), the parameters nevertheless apply for financial reporting purposes. ..~1=or financial reporting purposes, an actuarial valuation is re uired at least biennially for OPEB plans with a o al mem ership (includin employees in active service, terminated employees who have accumulated benefits but are not yet receiving them, and retired employees and beneficiaries currently receiving benefits) of 200 or more, or at least triennial) for lans with a total membership of fewer than 20Q. The projection of benefits should include a enefits covered by the current substantive plan (the plan as understood by the employer and plan members) at the time of each valuation and should take into consideration the pattern of sharing of benefit costs between the employer and plan members to that point, as well as certain legal or contractual caps on benefits to be provided. The http://www. gasb.org/st/summary/gstsm45.html Page 2 of 5 2/12/2008