For Immediate Release: February 13, 2024
Contacts:
Employer/auditor inquiries: Marie Mullen, Director of Finance, (603) 410-3656; marie.mullen@nhrs.org
Media inquiries: Marty Karlon, Director of Communications and Legislative Affairs, (603) 410-3594; public_relations@nhrs.org
CONCORD, NH – The New Hampshire Retirement System (NHRS, the retirement system) has released reports for fiscal year (FY) 2023 related to Governmental Accounting Standards Board (GASB) Statements No. 68 and No. 75.
These GASB reports are for employers with fiscal years ending anytime between July 1, 2023, and June 30, 2024. The reports are available at: https://www.nhrs.org/employers/employer-resources/gasb
NHRS has also posted a GASB overview for political subdivisions that answers many common questions about these reports. The overview is available at:
https://www.nhrs.org/docs/default-source/gasb/gasb_background_for_p_subs.pdf
GASB is an independent, non-profit organization that sets financial accounting and reporting standards for state and local governments. GASB is the source of generally accepted accounting principles (GAAP) used by state and local governments in the United States. While GASB has no enforcement authority, public employee pension plans – including NHRS – typically follow GASB rules in order to obtain unmodified opinions from their auditors. Adhering to GASB standards is also an important consideration for the bond rating agencies.
GASB 68
GASB Statement No. 68, “Accounting and Financial Reporting for Pensions,” impacts financial reporting of participating state and local governments.
The standards – which in 2014 replaced previous guidance from GASB – changed the way pension plans report financial information for accounting purposes but did not force pension plans to change their funding policies, which are typically defined by statute. Under GASB 68, individual employers must report a proportionate share of the net pension liability (NPL) and the pension expense on their financial statements, along with related deferred outflows of resources and deferred inflows of resources.
The GASB 68 reports are:
- GASB Statement Nos. 68 and 75 Employer Reporting and Accounting Schedules June 30, 2023 (“GRS Report”) – Prepared by Gabriel Roeder Smith & Company (GRS), the retirement system’s independent actuary. Note: This combined report contains information on GASB 68 and GASB 75.
- Schedule of Employer Allocations and Schedule of Pension Amounts by Employer June 30, 2023 (“Plante Moran Report”) – Prepared by NHRS and audited by Plante Moran, the retirement system’s independent external auditor.
GASB 75
GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions,” took effect for governmental employers with fiscal years ending June 30, 2018, or later. This statement changed the financial reporting framework for other post-employment benefits (OPEB) benefits. OPEB refers to the benefits – other than pensions – that a state or local government employee receives upon retirement. The most significant OPEB offering is typically retiree medical insurance, though other benefits such as life insurance are also covered by this umbrella term. For GASB purposes, the NHRS Medical Subsidy is an OPEB benefit.
Note: While NHRS is providing employer-level GASB 75 liability and expense information regarding the Medical Subsidy, an employer may have additional OPEB liabilities that the retirement system is unaware of, such as employer-funded health care or life insurance for retirees. NHRS advises employers to discuss the impact of GASB 75 with their auditors.
The GASB 75 reports are:
- GASB Statement Nos. 68 and 75 Employer Reporting and Accounting Schedules June 30, 2023 (“GRS Report”) – Prepared by Gabriel Roeder Smith & Company (GRS), the retirement system’s independent actuary. Note: This combined report contains information on GASB 68 and GASB 75.
- Schedule of Employer Allocations and Schedule of OPEB Amounts by Employer June 30, 2023 (“Plante Moran Report”) – Prepared by NHRS and audited by Plante Moran.
How to use the reports
Plante Moran auditors have tested the GASB 68 and GASB 75 information in the employer schedules in the GRS Report and issued unmodified, clean opinions in their audit reports. Employers should use the schedules in both reports; the Plante Moran Report to prepare the financial statements, footnote disclosures, and required supplementary information (RSI) and the GRS Report to obtain the sensitivity analysis and schedule of deferred inflows and outflows by year.
Although these reports only impact financial accounting, NHRS recognizes that the release of the reports has the potential to spur questions. The retirement system wants to emphasize that regardless of what the employer-level proportionate share and expense are for GASB 68 and GASB 75, those numbers are for accounting and financial reporting purposes only and do not impact future NHRS employer contribution rates or local property tax rates. The retirement system has a statutory funding schedule to pay down its Unfunded Actuarial Accrued Liability (UAAL), which is not affected by GASB requirements.
About NHRS
NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries. The State of New Hampshire and more than 460 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers. NHRS has approximately 48,500 active members and 43,500 benefit recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code.
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