For Immediate Release: September 14, 2018
Employer/auditor inquiries: Heather Fritzky, Director of Finance, (603) 410-3540; [email protected]
Media inquiries: Marty Karlon, Public Information Officer, (603) 410-3594; [email protected]
CONCORD, NH – The New Hampshire Retirement System (NHRS, the retirement system) has released two reports concerning the implementation of Governmental Accounting Standards Board (GASB) Statement No. 75, which impacts financial reporting for some participating employers.
These reports deal with financial reporting for other post-employment benefits (OPEB). 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.
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 – which was issued in 2015 to replace Statement No. 45 – makes changes to the financial reporting framework for OPEB benefits and requires additional disclosures and required supplementary information.
In recent years, GASB also updated accounting standards for pensions by issuing Statements No. 67 and 68. NHRS began providing employer-level GASB 68 data for participating employers beginning in 2015. GASB 75 is similar to GASB 68, in that it requires participating governmental employers to report their proportionate share of the net OPEB liability and expense on their financial statements. However, there is one significant difference that employers need to be cognizant of: while NHRS is providing employer-level GASB 75 liability and expense information regarding the Medical Subsidy, an employer may have additional OPEB liabilities which require reporting under GASB 75, such as employer-funded health care benefits or life insurance for retirees. NHRS advises employers to review the impact and requirements of GASB Statement No. 75 with their auditors.
The reports are:
- GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions (June 30, 2017) (“GRS Report”) – Prepared by GRS, the retirement system’s independent actuary.
- Schedule of Employer Allocations and Schedule of OPEB Amounts by Employer (June 30, 2017) (“KPMG Report”) – Prepared by NHRS and audited by KPMG, an independent external auditor.
KPMG auditors have tested the information in the employer schedules in the GRS Report and issued an unmodified, “clean” opinion as a part of their audit report. Employers should use the schedules in both reports; the KPMG 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 inflow and outflows by year. Both reports are available at: https://www.nhrs.org/employers/employer-resources/gasb/gasb-reports
These reports are for employers with a fiscal year ending on or after June 30, 2018. Updated reports will be issued in early 2019 for employers with a fiscal year ending on or after December 31, 2018.
NHRS recognizes that the release of reports which include employer-specific proportionate shares of the retirement system’s net OPEB liability and expense has the potential to spur questions or concerns. NHRS emphasizes that this data is for accounting and financial reporting purposes only and will not impact future NHRS employer contribution rates or local property tax rates. In an effort to assist participating employers with the implementation of GASB 75, the retirement system has developed a list of frequently asked questions, which is available at: https://www.nhrs.org/faqs/faq-gasb-75
NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries. The State of New Hampshire and nearly 470 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers. NHRS has approximately 48,000 active members and 35,000 pension 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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