GASB Standards: Frequently Asked Questions

Updated March 2017

The Governmental Accounting Standards Board (GASB) is a nongovernmental regulatory body charged with setting authoritative standards of accounting and financial reporting for state and local governments. Governmental employers preparing financial statements adhering to generally accepted accounting principles must comply with GASB standards.

To help employers participating in DRS-administered plans meet the financial reporting requirements of the standards, we have compiled this list of frequently asked questions.

1. As a DRS employer, what are the main GASB Statement 68 requirements for my organization?

GASB Statement 68 significantly changed pension accounting and financial reporting for governments by separating pension accounting methodology from pension funding methodology.

GASB Statement 68:

  • Requires employers to report their proportionate shares of a net pension liability or asset in their financial statements
  • Changed the amount employers report as pension expense and deferred inflows and outflows in their financial statements
  • Changed note disclosures and required supplementary information based on accounting measures

2. What changed?

The standards change how pension plan liabilities are disclosed in the financial statements of public pension plans and how they are accounted for in the financial statements of participating employers. The standards do not affect or alter how public employee pensions are funded or how employer contribution rates are calculated.

3. Why did it change?

The change was made to provide additional transparency regarding the reporting of pension liabilities and expenses and the impact of these obligations on financial statements.

4. Who is affected by GASB statements?

DRS-administered pension plans and participating employers who prepare financial statements in accordance with Generally Accepted Accounting Principles (GAAP) are impacted.

5. When did the change take effect?

The standards became effective for fiscal years beginning after June 15, 2013, for DRS and June 15, 2014, for participating employers.

6. How do the GASB statements impact DRS-covered employers?

The standards state that employers participating in cost-sharing, multiple-employer plans must report a net pension liability and expense equal to their proportionate shares of any collective net pension liability and expense in their financial statements.

7. What cost-sharing, multiple-employer plans does DRS administer?

  • All plans in the Public Employees' Retirement System (PERS)
  • All plans in the Teachers' Retirement System (TRS)
  • All plans in the School Employees' Retirement System (SERS)
  • All plans in the Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF)
  • All plans in the Public Safety Employees' Retirement System (PSERS)

8. Who provides employers with their allocation of the net pension liability?

The Washington Office of the State Actuary (OSA) calculates a collective net pension liability (NPL) for each of the plans DRS administers. The NPL is reported in the notes to the plan financial statements in the DRS Comprehensive Annual Financial Report. DRS has published allocation percentages, based on annual contributions, for each of the employers participating in the DRS-administered plans. However, an AICPA white paper states that the employers and the employer auditors have a responsibility to verify and recalculate amounts specific to the applicable employer.

9. When does DRS provide employers with their proportionate share of the net pension liability?

Proportionate share information as of the department’s June 30 year end becomes available on the DRS website by Nov. 1 of each year. Proportionate share information for 2016 is located in the current Participating Employer Financial Information (PEFI) publication. Historical proportionate share information for fiscal years 2013 through 2015 is available in the Previous Financial Statements box section.

10. What is the basis used for calculating the employers’ proportionate share?

DRS calculates the proportionate shares using each year’s employer contributions based on the department's June 30 fiscal year end.

11. What information does DRS provide employers for GASB 68 financial reporting requirements?

Each year, DRS produces a Comprehensive Annual Financial Report (CAFR) and a Participating Employer Financial Information (PEFI) publication for the most recent fiscal year ending June 30. These reports are posted on the DRS website no later than Nov. 1. The DRS CAFR includes note disclosures and Required Supplementary Information (RSI) at the plan level. The PEFI includes employer and nonemployer allocation schedules, the schedules of collective pension amounts, amortization schedules, and additional notes. Processed transmittal summaries are available for employers through DRS eServices to assist employers in confirming the contributions used in determining their employer allocation of the NPL for each plan DRS administers. Employers and their auditors are encouraged to use this information to help meet the financial reporting requirements of GASB 68.

12. Are the schedules DRS provides to employers audited?

Yes. DRS contracted with its CAFR auditors, CliftonLarsonAllen, to express a written opinion on the schedule of employer and nonemployer allocations and the schedule of collective pension amounts for each DRS-administered multiple-employer, cost-sharing retirement plan.

13. Does DRS provide examples of journal entries and note disclosures employers need to meet the financial reporting requirements of GASB 68?

No. Even though DRS does provide plan information and audited allocation percentages for employers, detailed accounting instructions should come, as always, from the State Auditor’s Office (for local governments), the state Office of Financial Management (for state agencies) and the Office of Superintendent of Public Instruction (for school districts).

14. What is census data? Will my organization be selected for census data testing?

Census data refers to retirement system members’ information, including birthdate, gender, date of hire, years of service, compensation and date of termination. Census data is used in the actuarial valuation that determines net pension liability.

Testing of the data is currently being performed by ClintonLarsenAllen (CLA), DRS' external auditors. CLA has audited the DRS CAFR since 2012. CLA has also been the auditor for the PEFI since the first report was published. The PEFI provides employers with information necessary to meet GASB 68 reporting requirements.

During January 2017, DRS notified employers who had been selected for a census data audit. CLA is expecting to complete this round of audits by Sept. 30, 2017. Employers who are selected for next year’s audits will be notified by DRS in the winter of 2017/2018.

15. Where can I find supporting audited information at the plan level?

CAFR and PEFI publications for the most recent fiscal year ending June 30 are posted on the DRS website by Nov. 1 of each year. The DRS CAFR includes note disclosures and Required Supplementary Information (RSI) at the plan level. The PEFI includes employer and nonemployer allocation schedules, the schedules of collective pension amounts, amortization schedules, and additional notes. Employers and their auditors are encouraged to use this information to help meet the financial reporting requirements of GASB 68.