In anticipation of the Governmental Accounting Standards Board (GASB) issuing its Exposure Drafts outlining new rules for how state and local governments account for their pensions, the National Association of State Retirement Administrators and the National Council on Teacher Retirement issued a joint statement expressing both hope and concern.
In the statement, the organizations expressed concern over the elimanation of the annual required contribution (ARC) on financial statements. The ARC, according to the statement, has provided policymakers and others with a funding target and a tool to know whether pension plan sponsors are making an effort to advance-fund pension costs. Eliminating this tool would drastically change the debt-to-asset ratio of the accounts.
The groups are also worried about the changes to the accounting requirements for cost-sharing retirement plans, saying that they believed current disclosures to be adeuqate.
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"We will continue to work closely with GASB, including submitting written comments on behalf of our membership and participating in the October public hearings to clarify our issues so that policymakers and other stakeholders can have a means to identify funding targets, and to enable others to be able to see more clearly whether those targets are being met on an annual basis," the groups said in the statement.
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