• Skip to primary navigation
  • Skip to main content

Van Iwaarden Associates

Retirement Planning For Employers

  • Home
  • Public Sector
    • GASB 67/68 Pension Accounting
      • GASB 67/68 FAQs and Resources
      • Fire Relief Associations
    • GASB 74/75 OPEB Accounting
      • GASB 75 & OPEB Expertise
      • GASB 75 & OPEB FAQs
    • Discount Rates, Crossover, Agent Plans
    • Speeches & Articles – Public Plans
  • Private Sector
    • Plan Design
      • Defined Benefit Plans
      • Cash Balance Plans
        • Cash Balance Plan Case Studies
        • Cash Balance Plan FAQs
      • Profit-Sharing Plans
      • 401(k) Plans
      • 403(b) Plans
      • Retiree Medical Benefits
    • Actuarial Services
      • Cross Testing
      • Pension Plans
      • FASB Retiree Medical
    • Speeches & Articles – Private Plans
  • Blog
  • About VIA
    • Our Team
    • Offices
    • Get a Life!

GASB 74/75 OPEB Accounting

GASB stands for the Governmental Accounting Standards Board.  They develop the accounting rules for public sector employers.

OPEB stands for Other Post-Employment Benefits.  They are benefits (other than pensions) provided after employment ends.  They include:

  • Retiree health coverage – which usually generates the biggest OPEB costs,
  • Other retiree benefits like dental, vision and life insurance coverage, and
  • Termination benefits that must be used for health coverage (such as payments to a health savings account) – but not those based on unused vacation or sick leave.

In 2004, GASB issued Statements No. 43 and 45 that required governmental entities to recognize the cost of OPEB’s when they are earned (while employees are working), rather than when they are paid (after employees retire.)  GASB 43 was for plan -perspective accounting (i.e. funded plans), while GASB 45 applied to employer financial statements.

New accounting rules (GASB 74 and GASB 75) are now replacing GASB 43 and GASB 45, and there are several significant differences:

  • The entire unfunded accrued liability goes on the face of financial statements.  This is known as the Net OPEB Liability.
  • Discount rates for unfunded plans are now based on a municipal bond index rate.
  • Funded plans will use a discount rate equal to the expected asset return, to the extent that current assets and expected contributions are expected to pay all future benefits.  A municipal bond index rate is used to discount future benefit payments not covered by projected trust assets.
  • The required note disclosures and RSI are significantly expanded.

You can read more about GASB 75 & OPEB in our F.A.Q.s, or view our OPEB Expertise. 

Share this:

  • Tweet

Copyright © 2023 · Northern Consulting Actuaries, Inc. d/b/a Van Iwaarden Associates. All rights reserved.