Chapter 15: Financial Reporting
DRS annual financial reports
- Full list of DRS covered employers (page 225)
GASB standards for pensions
Compliance with Governmental Accounting Standards Board (GASB) standards is especially complex here in Washington state given the number of pension plans administered by DRS and the large number of employers participating in each plan. With that in mind, we have compiled resources to assist employers with GASB 68 reporting requirements. We encourage you to review these resources and to discuss the reporting requirements with your auditors.
GASB 68 reporting requirements apply to participating employers who prepare financial statements in accordance with Generally Accepted Accounting Principles (GAAP). 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.
GASB Statement 68 impacts to DRS-covered employers
- Added requirement for 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
Employer resources DRS provides
Employers and their auditors are encouraged to use this information to assist in meeting the financial reporting requirements of Statement 68.
Each year, DRS produces an Annual Comprehensive Financial Report (ACFR) and Participating Employer Financial Information (PEFI) for the most recent fiscal year ending June 30. These reports are posted on the DRS website no later than Nov. 1.
- The ACFR includes note disclosures and Required Supplementary Information (RSI) at the plan level.
- The PEFI includes GASB 68 information on each cost-sharing multi-employer plan DRS administers. The PEFI includes the employer and non-employer allocation schedules, the schedules of collective pension amounts, amortization schedules and additional notes.
- The plan-level schedules in the PEFI are displayed in dollars. Before 2018, schedules were displayed in thousands.
Processed transmittal summaries are available for employers through the Employer Reporting Application (ERA) under Processes\Reports\Processed Transmittal Summary.
- The summaries assist employers in confirming the contributions used in determining their employer allocation of the NPL or NPA for each cost-sharing multi-employer plan DRS administers (with the exception of LEOFF Plan 1).
- Instructions for accessing the processed transmittal summaries and FAQ for understanding the employer and non-employer allocation schedules are included in the ERA Contribution Reconciliation.
Frequently asked questions
1 – What DRS administered cost-sharing, multiple-employer plans are included in the DRS ACFR and PEFI?
All plans in PERS, TRS, SERS, LEOFF and PSERS.
2 – Where can I find the net pension liability (NPL) for the plans my organization participates in?
The Washington Office of the State Actuary (OSA) calculates a collective NPL for each of the plans DRS administers.
The NPL or NPA of each plan is included in the notes following the employer and non-employer allocation schedules within the DRS PEFI. In addition to the PEFI, the NPL of each plan is reported in the notes to the plan financial statements in the DRS Annual Comprehensive Financial Report (ACFR) and the required supplementary information of the DRS ACFR.
3 – Does DRS provide employers with their allocation of the NPL?
DRS has published allocation percentages in the DRS PEFI annual report for each of the employers participating in the DRS-administered plans; however, an AICPA white paper states that employers and their employer auditors have the responsibility to verify and recalculate their own amounts.
4 – What basis is used for calculating the employers’ proportionate share?
DRS calculates the proportionate shares using the employer contribution transmittals we received and processed within the fiscal year ended June 30 (except for LEOFF Plan 1). LEOFF Plan 1 allocations are based on the total historical employer contributions to LEOFF Plan 1 (1971-2000) and LEOFF Plan 1 retirement benefit payments during fiscal year ended June 30.
Processed transmittal summaries are available for employers through the Employer Reporting Application (ERA) under Processes\Reports\Processed Transmittal Summary. This helps employers confirm the contributions used in determining their employer allocation of the NPL for each plan DRS administers.
5 – Are the schedules DRS provides audited in the PEFI?
Yes. DRS contracted with its ACFR auditors, UHY LLP, to express a written opinion on the schedule of employer and non-employer allocations and the schedule of collective pension amounts for each DRS-administered multiple-employer, cost-sharing retirement plan.
Unaudited schedules of employer and non-employer allocation schedules in Excel format are available upon request.
6 – 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 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).
7 – Where can I find supporting audited information at the plan level?
ACFR 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 ACFR includes note disclosures and Required Supplementary Information (RSI) at the plan level. The PEFI includes employer and non-employer 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.
8 – Where can I find the Unfunded Actuarial Accrued Liability (UAAL) rates to fund PERS Plan 1 and TRS Plan 1?
Plan 1 UAAL rates include: employer-contribution portion of PERS Plans 2 and 3, SERS Plans 2 and 3, and PSERS Plan 2, which RCW 41.45.060 requires fund the UAAL of PERS Plan 1. The employer-contribution portion of TRS Plans 2 and 3, fund the UAAL of TRS plan 1 as required by RCW 41.45.060. See Contribution Rate Tables.
Employer Participation in the Audit of DRS Financial Reports
As a participating employer of a DRS administered plan, DRS’ external auditors may select your organization to participate in the annual audit of the ACFR and PEFI. If selected, DRS Financial Reporting will contact your organization and ask that you send the requested information directly to DRS’ external auditors at UHY LLP.
DRS’ census data
Census data refers to retirement system members’ information, including birthdate, gender, date of hire, years of service, compensation and date of termination. The Office of the State Actuary uses the census data in the actuarial valuation that determines net pension liability.
An AICPA whitepaper provides guidance regarding plan management’s responsibility for the completeness and accuracy of census data. Annual census data testing is performed by DRS’ external auditors to confirm the completeness and accuracy of the data supplied by employers.
Employers who are selected by DRS’ external auditors to participate in the annual census data audit will be contacted by DRS Financial Reporting in late fall/winter of each year they are selected.
Contribution confirmations refers to the member and employer contributions transmitted to DRS by a participating employer and processed by DRS.
Employers who are selected by DRS’ external auditor to participate in the annual contribution confirmations will be contacted by DRS Financial Reporting in July/August of each year they are selected.
If you have any questions or comments, email Employer Support Services or call 360-664-7200.