Public Sector Accounting and Budgeting

Public Sector Accounting and Budgeting

Reporting on public pension plans based on budget and GASB statements 67 and 68

Document Type : Review Article

Author
Moosa Firoozkoohi
M. A in Accounting, Mazandaran University, Mazandaran, Iran
Abstract
Reporting on pension plans and measuring their dimensions has received more attention in the last decade. The Governmental Accounting Standards Board (GASB) has previously issued two statements, no. 25 and 27. In this regard, there has been criticism from governments and users of government financial statements that the two statements do not fully measure and report liabilities. So they get misleading information. According to the two statements, governments were not required to report pension liabilities for which no budgets were provided in the comprehensive annual financial statements. Following this, the GASB issued Statements 67 and 68. Accordingly, state and local governments are required to report unfunded pension liabilities on their balance sheets, which provides a more complete picture of their financial health status. Of course, some researchers believe that pension plans provide optimistic estimates of budgeting due to statements 67 and 68. This and some other evidence suggest that the new guidelines also need to be amended to ensure proper measurement and budgeting in public sector pension planes. 
Keywords
Pension plans
GASB no. 67&68
Governmental financial reporting
Budget
Financial transparency

Subjects

Commonwealth of Kentucky. (2015). Comprehensive Annual Financial Report for FY 2015, 99.
Mortimer, J. W. & Henderson, L. R. (2014). Measuring Pension Liabilities under GASB Statement No. 68. Accounting Horizons, 28(3), 421-454.
Munnell, A. L., Aubry, J. P., Hurwitz, J. & Quinby, L. (2012). How Would GASB Proposals Affect State and Local Pension Reporting? (No. 23, Center for Retirement Research at Boston College.
Public Pension Plan Investment Return Assumptions. (2017). NASRA Issue Brief, National Association of State Retirement Administrators.

  • Receive Date 22 March 2020
  • Revise Date 23 April 2021
  • Accept Date 28 May 2021