When an employer wants to hire the best and the brightest, they often include benefits that go beyond the actual employment term. Postemployment Benefits (OPEB) can include health care and life insurance, which go above and beyond the typical pension.
School districts and Municipalities commonly use the above benefit plans in their hiring approach.
Doing so, however, creates an accounting requirement known as, “Financial Reporting for Postemployment Benefit Plans other Then Pension Plans”, or Statement No. 45 frequently referred to as GASB 75. The Postemployment benefits are part of an exchange of salaries and benefits to employees for the work they perform while activly working for the organization. When they are no longer active employees they will continue to receive benefits and that exchange must still be accounted for.
Until Statement No, 45 financial reporting failed to recognize the cost benefits to the employer when services were received, nor did they provide information about the accrued liabilities for the promised benefits. It was also difficult to clearly see how those OPEB benefits were being financed.
In simple English, this means that new accounting requirements were created to help employers better understand the current cost and future impact of the post retirement plans, and how to properly document how that was being financed.
While the requirements certainly do have complexities to them, our GASB 75 and GASB 74 service allows school districts and municipalities to have an expert by their side and do the hard work for them. It is our job, to calculate how much should be contributed now to ensure that a sufficient level of resources are available in the future. Simply put, we help you make sure you can keep the promise you made to your employees.
Jefferson Solutions specializes in actuarial accounting for GASB 75 and GASB 74, and at a price point that typically eliminates the need to do an RFP. Please use our quote form and an expert will get back to you (usually) within 24 hours.