What is GASB 45?March 16, 2012 — 1,017 views
Government Accounting Standards Board (GASB) 45, a new accounting law, states that public employers no longer are required to report post-retirement health benefits on a pay-as-you-go basis. They are now allowed to account for and report annual cost of other post-retirement benefits (OPEB) for current and future retirees.
The standard does not force public employers to pre-fund OPEB benefits, but it may encourage jurisdictions to consider new measures to improve the financial health and stability of International Association of Fire Fighters (IAFF) members.
GASB 45 was implemented to provide complete and reliable financial reports regarding the costs and financial responsibilities that governments often incur when providing post-employment benefits (other than pensions) to employees. Post-employment healthcare benefits are significant financial commitments for many government agencies and employers, and GASB 45 is intended to help keep track of those payments.
When agencies implement GASB 45, the standard will foster improved accountability. This in turn can help determine the level and types of benefits governments provide to retirees who have resigned from their positions in various fields.
It is incorrect to describe GASB as future costs. Rather, the standard is written from an accounting standpoint and handles only the transactions that have already occurred in any given fiscal year.