1. October 2018 BAR Sabra Sand and Grace Jimenez
GASB 68, 73 & 75 Pensions & OPEB
October 2018 BAR
Sabra Sand and Grace Jimenez

2. Basis GASB 68 covers all retirement plans through DRS
PERS 1,2 and 3
TRS 1,2, and 3
Measurement date is one year behind
GASB 73 covers TIAA-CREFF supplemental portion
Measurement date is current
Both Calculated and reported on a proportionate share basis of the totals for each retirement plan
GASB 75 covers Other Postemployment Benefits through PEBB

3. GASB 68 Calculations use both the DRS PEFI and the DRS CAFR
Note data comes from both the DRS CAFR and the Washington State CAFR
Measurement date is a year behind

4. GASB 68 Start with the Excel workbook-preferably from the prior year
We will work on PERS 1
First, update the DRS total values (rows 6-9)
This data comes from the DRS FY17 PEFI page 126 shown by plan
Amounts stated in thousands-need to multiply by 1,000 to get number to take proportionate amount of

5. From College Excel worksheet

6. GASB 68 – Proportionate share
Proportionate share of
Beginning and ending NPL
Deferred outflows
Deferred inflows
Pension expense
Pension contributions
Change in proportionate share of ending NPL, DI, DO from prior year
Amortized by useful life of plan
Plan 1 has no useful life
Plans 2/3 useful life changes from year to year - defined by DRS

7. GASB 68 – Proportionate share – PERS 1
Get proportionate share from the FY17 PEFI
Proportionate share is stated as both a number and a percentage
For our calculations, we need the percentage
PERS 1 proportionate share includes an additional contribution referred to as a PERS Plan 1 UAAL
This is the underfunded portion that is getting pulled from PERS 2/3 contributions
Need to add both the PERS 1 percentage and the PERS 1 UAAL together to get the correct proportionate share for PERS 1

8. GASB 68 – Proportionate share – PERS 1
PERS 1 Proportion
Plan %
Plan 1 UAAL %
Total %

9. GASB 68 – Proportionate share – PERS 1
Move previous year (FY 16) proportionate share up to replace FY 15 data
Enter the proportionate share calculated from the two PEFI amounts
PERS 1 and PERS 1 UAAL = %
Then go to the FY PEFI to get the FY 18 Proportionate share amounts as well
Need this to calculate proportionate share of current year contributions only
In addition, need to get FY18 total contributions
Comes from PEFI section “DRS 2018 CAFR Employer and Nonemployer Contributions” (FY17, page 133; FY18, page………)
Also stated in thousands

10. GASB 68 – Proportionate share – PERS 1

11. GASB 68 – Proportionate share – PERS 1
The Proportionate share percentages are then multiplied across the columns against the DRS totals for each category to get the college’s proportionate share
*Some columns with no current year values were hidden for this presentation

12. GASB 68 – Change in Proportionate share – PERS 1
On the second tab of the workbook, you will need to calculate your change in proportion from the prior year to the current year you are working on
This basically takes the prior year amounts and increases or decreases them to adjust for the change in percentage from one year to the next
You will need to determine the change in amount for:
Ending Net Pension Liability
Any Deferred Outflows items
Any Deferred Inflows items

13. GASB 68 – Change in Proportionate share – PERS 1
Update all of the values to be the prior year values that you used last year in your pension liability calculations (FY16)
Update the proportionate share amounts to show the FY16 share and then the new FY17 share

14. The values you will need for you for your entries to adjust your values are any changes in Ending NPL, and any deferred inflows and outflows.
A formula is built into the spreadsheet to bring them forward to the first tab

15. GASB 68 – Proportionate share – PERS 1
Now, you should have all the values to do your T-accounts
To begin your T-account calculations
Enter your beginning balances (from the prior year calculations) for:
Pension Liability
Deferred Inflows
Deferred Outflows
No expense values are carried forward as those were expensed in your financial statements

16. GASB 68 – Proportionate share – PERS 1
Next, reverse the prior year deferred inflows against pension liability as well as the prior year deferred outflows against pension liability
Debit the current year pension expense amount from above to:
Expense/pension liability
Book current year deferred inflows amounts from above to:
Pension liability/deferred inflows
Book current year deferred outflows amounts from above to:
Deferred outflows/pension liability

17. GASB 68 – Proportionate share – PERS 1
Make an entry for the change in proportion amounts
This gets fully expensed for PERS and TRS plan 1, but amortized for plans 2 and 3
Pension liability/expense
Make an entry for the deferred current year contributions (FY18) since we are reporting a year behind
Deferred outflows/expense
The ending balance in pension liability should equal your Ending net pension liability from the above calculation multiplying the total NPL by your proportionate share percentage.
There may be a small round difference due to the calculations as a percentage of thousands. You will need to make an entry to adjust NPL against expense to balance.

18. GASB 68 – PERS 2/3 and TRS 2/3
PERS 2/3 and TRS 2/3 both have useful lives left
This means that you must amortize the change in proportionate liability over that useful life/recognition period as determined by DRS
From FY17 DRS PEFI Notes page 131

19. GASB 68 – PERS 2/3 and TRS 2/3 (decrease in proportionate share)
If your change in proportionate liability is a reduction or negative amount in total, it is a deferred inflow
The initial entry in the year of the change is: 5281/5265 or Pension Liability/deferred inflow
Then you must create a schedule to amortize/expense over the recognition period as determined by DRS in the PEFI

20. GASB 68 – PERS 2/3 and TRS 2/3
For each year of amortization, the entry is a 5265/6598 or deferred inflow/expense
These entries are necessary each year until fully amortized

21. GASB 68 – PERS 2/3 and TRS 2/3 (increase in proportionate share)
If the change in proportionate liability is an increase or positive amount in total, it is a deferred outflow
The initial entry in the year of the change is: 1974/5281 or deferred outflow/pension liability
For each year of amortization, the entry is a 6598/1974 or expense/deferred inflow
These entries are necessary each year until fully amortized

22. GASB 73 – Pensions not within the scope of GASB 68
GASB 73 applies to pension plans that do not have a dedicated trust - TIAA-CREF Supplemental Retirement Plan The Total Pension Liability (TPL) represents the amount of Supplemental Retirement Plan (SRP) benefits, earned as of the valuation date, expected to be paid to current and future retirees.

23. GASB 73
State Board sends member data to the Office of the State Actuary to perform the valuation.
Valuations are performed every other year (2017, 2019, …)
On even years the prior year results are rolled forward to the new measurement date (6/30/2018).

24. GASB 73 – Proportionate Share
Proportionate share is based on annual contributions to the SBRP plan.
Employer contributions listed on the Pension/OPEB Disclosure Form were used to calculate FY18 proportionate share.
Colleges will either see an increase (deferred outflow) or a decrease (deferred inflow) in proportionate share of the TPL. Plan had an overall decrease in TPL.

25. GASB 73 – JE, Notes, RSI
You will receive an updated Excel workbook for FY18 which will contain:
Required journal entry for financial statements
Tables required for your Notes to Financial Statements
Tables required for your RSI

26. GASB 75 – Other Postemployment Benefits
GASB 75 covers Other Postemployment Benefits
Medical
Dental
Vision
For our system, this is the postemployment benefits provided by the PEBB program, administered by the Health Care Authority.

27. GASB 75 – Who/What
Through the PEBB program all CTC’s provide other postemployment benefits to their retirees. OPEB creates implicit and explicit rate subsidies for retirees, that are funded through active employee premiums. The subsidies lower monthly premiums for retirees. Retirees who elect to continue coverage & pay the retiree premiums are receiving OPEB.

28. GASB 75 – Subsidies
Implicit rate subsidy – “blended premium” The total amount by which the premiums are higher for active employees when they are pooled with retired employees than when the active employees are separately rated. Explicit rate subsidy – Flat amount of employer contribution going towards retiree costs

29. GASB 75 – Biggest Changes
On the face of the financial statements, College’s will report their proportionate share of the State’s:
OPEB liability (Short & Long-term)
Deferred Outflows
Deferred Inflows
OPEB expense
Impact to net position

30. GASB 75 – Proportionate Share
Your proportionate share was calculated using your active, eligible employee headcount for PEBB.
Active & enrolled
Active & waived
Both will be eligible to receive benefits at retirement.

31. GASB 75 – Calculating your #s
OFM did a ton of work for us this year.
Spreadsheet allows you to select your College and your journal entry will populate.
Most important items for this year:
Double check your entry using your proportionate share
Double check your tables OFM provided
Understand the basics of GASB 75 so you can explain your numbers to your auditor.

32. GASB 75 – OPEB expense
OSA valuation does not take into account the transactions subsequent to the measurement date or the change in proportionate share between agencies. (12 or 14) OFM report does not include FY18 benefit payments made by employers on behalf of employees for retiree subsidies. (14)

33. GASB 75 – OPEB expense
Difference between your OPEB expense table in the Notes and the amount in your financial statement entry should be the transactions subsequent to the measurement date (14)

34. Questions??