public employees retirement association of minnesota gasb 68 implementation september 24, 2015...

Public Employees Retirement Association of Minnesota

GASB 68 Implementation

September 24, 2015

Presented by: Dave DeJonge, PERA Interim Executive Director, and

Jim Riebe, PERA Principal Accounting Officer

2015 MNGFOA Annual Conference

Alexandria, Minnesota1


Session ObjectivesAt the completion of this session, participants will:

Know where to find and how to use the GASB 68 information PERA has prepared for employers.

Be able to prepare: Journal entries to incorporate pension amounts into government-

wide financial statements; Extensive employer pension footnote disclosures; and Two required supplementary information pension schedules.

Understand: Requirements for fire relief associations and the information PERA

will provide for the Statewide Volunteer Firefighters Plan; How to account for pension amounts in proprietary funds; and Employer’s and employer auditor’s responsibilities for the pension

information provided by PERA.

2


GASB 68 Overview (1 of 2)Employers report their proportionate share of collective

net pension liability, deferred inflows of resources and deferred outflows of resources, and pension expense on their government-wide financial statementsGASB 67/68 pension amounts calculated by PERA’s actuary

Pension expense calculated as change in net pension liability during the year, plus or minus amortization of deferred inflows and outflows

Pension expense no longer based on contributions to the plan

Employer’s proportionate share calculated by PERA based on employer’s contributions at the measurement date as a percentage of plan contributions from all employers

3


GASB 68 Overview (2 of 2)

Significantly more footnote disclosuresDisclosures required for each plan

PERA will provide suggested footnote templates

Required supplementary information Ten-year Schedule of Employer’s Proportionate Share of the

Net Pension Liability (prospectively applied)

Ten-year Schedule of Employer Contributions (option to provide ten years of information at transition or to apply requirement prospectively)

Municipalities affiliated with fire relief associations need to prepare a Ten-Year Schedule of Changes in the Net Pension Liability

4


Financial Reporting Toolkit (1of 2)

5


Financial Reporting Toolkit (2 of 2)

6


GASB 67/68 Actuarial Information

Gabriel, Roeder, Smith prepares two valuation reports for each planGASB 67/68 compliant valuation

Funding valuation

Use GASB 67/68 report to verify collective

pension amounts, NPL +/- 1% sensitivity

analysisGASB 67/68 valuation includes a NPL reconciliation

7


City of Brooklyn CenterGASB 68 Implementation

Case StudyThis case study is provided for illustration purposes only as if the city early-implemented GASB 68 for the year ended December 31, 2014. The GASB 68 information employers will use for their December 31, 2015, financial statements will not be available until February 2016.

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Schedule of Employer Allocations

9

Schedule of Employer Allocations (General Employees Retirement Fund)As of June 30, 2014

Employer Unit No. Employer Name Contributions Allocation %

0002-00 AITKIN COUNTY $598,540 0.1573%0006-00 ANOKA COUNTY $6,356,610 1.6701%0008-01 BECKER COUNTY $814,665 0.2140%0010-00 BELTRAMI COUNTY $932,224 0.2449%0012-00 BENTON COUNTY REVENUE $672,279 0.1766%0014-00 BIG STONE COUNTY $186,634 0.0490%0016-00 BLUE EARTH COUNTY $1,333,636 0.3504%0018-00 BROWN COUNTY $683,227 0.1795%0020-00 CARLTON COUNTY $1,020,241 0.2681%0022-00 CARVER COUNTY $2,114,127 0.5555%0022-09 CARVER COUNTY HISTORICAL SOCIETY $9,979 0.0026%0024-00 CASS COUNTY $849,624 0.2232%0026-00 CHIPPEWA COUNTY $368,518 0.0968%0027-00 CHIPPEWA COUNTY SWCD $9,983 0.0026%0028-00 CHIPPEWA COUNTY HOSPITAL $980,100 0.2575%0030-00 CHISAGO COUNTY $1,051,266 0.2762%3602-00 CITY OF BROOKLYN CENTER $528,555 0.1389%

… … … …

Total Employer Contributions $380,612,334 100.0000%


10

PERA Contributions ReconciliationPublic Employees Retirement Association of Minnesota

General Employees Retirement PlanReconciliation of Employer Proportionate Share Contributions to Employer Financial Statement Contributions

For the Year Ended June 30, 2014

YE 2013 YE 2014 Subtotal Subtotal Total

Employer Unit No. Employer Name

Employer Contributions - Matching

(6.25 or 6.5%)

Employer Contributio

n - Additional

(1%)

Adjustment for Employer Accrual

(Received in Current FY but Recognized in

Prior FY)

Adjustment for Employer

Accrual (Received in

Future FY but Recognized in Current FY)

Employer Contributions Allocated for

GASB 68

Employer Contributions NOT Allocated for GASB

68 (Omitted Deductions,

Member Buybacks, Employer Portion Paid by Employee,

Interest)

Employer Contributions

Amount Reported on

CAFR

0002-00 AITKIN COUNTY $535,331 $85,649 $22,440 $598,540 $0 $598,540

0006-00 ANOKA COUNTY $5,477,764 $876,443 $241,438 $243,840 $6,356,610 $358 $6,356,968

0008-01 BECKER COUNTY $702,298 $112,368 $814,665 $316 $814,981

0010-00 BELTRAMI COUNTY $803,641 $128,583 $932,224 $0 $932,224

0012-00 BENTON COUNTY REVENUE $579,551 $92,728 $672,279 $0 $672,279

0014-00 BIG STONE COUNTY $160,891 $25,742 $186,634 $0 $186,634

0016-00 BLUE EARTH COUNTY $1,149,687 $183,949 $1,333,636 $0 $1,333,636

0018-00 BROWN COUNTY $588,987 $94,239 $683,227 $0 $683,227

0020-00 CARLTON COUNTY $911,429 $146,045 $37,233 $1,020,241 $21 $1,020,262

0022-00 CARVER COUNTY $1,822,526 $291,601 $2,114,127 $471 $2,114,598

0022-09 CARVER COUNTY HISTORICAL SOCIETY $8,602 $1,376 $9,979 $0 $9,979

0024-00 CASS COUNTY $732,436 $117,188 $849,624 $0 $849,624

0026-00 CHIPPEWA COUNTY $316,500 $50,640 $14,070 $15,447 $368,518 $0 $368,518

0027-00 CHIPPEWA COUNTY SWCD $8,903 $1,424 $344 $9,983 $0 $9,983

0028-00 CHIPPEWA COUNTY HOSPITAL $844,917 $135,183 $980,100 $0 $980,100

0030-00 CHISAGO COUNTY $904,938 $144,792 $39,567 $41,102 $1,051,266 $2,958 $1,054,224

… … … … … … … … …

3602-00 CITY OF BROOKLYN CENTER $473,269 $75,723 $20,437 $528,555 $111 $528,666

… … … … … … … … …

Total All Employers$329,397,17

1$52,701,18

3 $9,163,798 $8,522,223$381,456,77

8 $794,328$382,251,10

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Schedule of Pension Amounts by Employer (1 of 2)

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Public Employees Retirement Association General Employees Retirement PlanSchedule of Pension Amounts by EmployerFiscal Year Ended June 30, 2014

Deferred Outflow of Resources

Employer Unit ID No. Employer Name

Beginning Net Pension

Liability (NPL)

Ending Net Pension Liability (Single

Discount Rate

Assumption 7.90%)(NPL)

Sensitivity of Ending Net

Pension Liability to

1% Decrease in Single

Rate Assumption

(6.90%)

Sensitivity of Ending Net

Pension Liability to 1% Increase

in Single Rate

Assumption (8.90%)

Differences Between Expected

and Actual Economic

Experience

Difference Between Projected and Actual Investment Earnings

Changes in Actuarial

Assumptions

Changes in Proportion

and Differences

Between Employer

Contributions and

Proportionate Share

of Contributio

ns

Total Deferred

Outflows of Resources

0002-00 AITKIN COUNTY $8,563,528 $7,389,166 $11,911,634 $3,668,239 $113,401 $0 $761,527 $0 $874,9280006-00 ANOKA COUNTY $90,921,480 $78,452,931 $126,469,291 $38,946,765 $1,204,008 $0 $8,085,355 $0 $9,289,3630008-01 BECKER COUNTY $11,650,318 $10,052,648 $16,205,274 $4,990,484 $154,277 $0 $1,036,025 $0 $1,190,3020010-00 BELTRAMI COUNTY $13,332,537 $11,504,175 $18,545,195 $5,711,073 $176,553 $0 $1,185,620 $0 $1,362,1730012-00 BENTON COUNTY REVENUE $9,614,235 $8,295,783 $13,373,137 $4,118,316 $127,314 $0 $854,963 $0 $982,2770014-00 BIG STONE COUNTY $2,667,596 $2,301,775 $3,710,553 $1,142,681 $35,325 $0 $237,221 $0 $272,5460016-00 BLUE EARTH COUNTY $19,076,035 $16,460,036 $26,534,243 $8,171,335 $252,610 $0 $1,696,370 $0 $1,948,9810018-00 BROWN COUNTY $9,772,113 $8,432,011 $13,592,742 $4,185,944 $129,405 $0 $869,003 $0 $998,4080020-00 CARLTON COUNTY $14,595,562 $12,593,995 $20,302,028 $6,252,097 $193,279 $0 $1,297,936 $0 $1,491,2150022-00 CARVER COUNTY $30,241,831 $26,094,607 $42,065,560 $12,954,271 $400,471 $0 $2,689,309 $0 $3,089,7800022-09 CARVER COUNTY HISTORICAL SOCIETY $141,546 $122,135 $196,887 $60,632 $1,874 $0 $12,587 $0 $14,4620024-00 CASS COUNTY $12,151,173 $10,484,818 $16,901,949 $5,205,028 $160,909 $0 $1,080,565 $0 $1,241,4740026-00 CHIPPEWA COUNTY $5,269,864 $4,547,179 $7,330,236 $2,257,378 $69,785 $0 $468,632 $0 $538,4170027-00 CHIPPEWA COUNTY SWCD $141,546 $122,135 $196,887 $60,632 $1,874 $0 $12,587 $0 $14,4620028-00 CHIPPEWA COUNTY HOSPITAL $14,018,491 $12,096,060 $19,499,337 $6,004,905 $185,637 $0 $1,246,619 $0 $1,432,256

3602-00 CITY OF BROOKLYN CENTER $7,561,819 $6,524,826 $10,518,283 $3,239,151 $100,136 $0 $672,448 $0 $772,584… … … … … … … … … … …

Total Allocated$5,444,074,00

0$4,697,499,00

0$7,572,558,00

0$2,332,002,00

0 $72,092,000 $0$484,124,00

0 $0 $556,216,000

Total Actuarial Valuation Amounts$5,444,074,00

0$4,697,499,00

0$7,572,558,00

0$2,332,002,00

0 $72,092,000 $0$484,124,00

0 $0 $556,216,000


Schedule of Pension Amounts by Employer (2 of 2)

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Public Employees Retirement Association General Employees Retirement PlanSchedule of Pension Amounts by EmployerFiscal Year Ended June 30, 2014

Deferred Inflows of Resources Pension Expense

Employer Unit ID

No. Employer Name

Differences Between Expected

and Actual Economic

Experience

Difference Between Projected and Actual Investment Earnings

Changes in Actuarial

Assumptions

Changes in Proportion

and Differences

Between Employer

Contributions and

Proportionate Share of Contributio

ns

Total Deferred Inflows of Resources

Proportionate Share of

Plan Pension Expense

Net Amortizatio

n of Deferred Amounts

from Changes in Proportion

and Proportionate Share of

Pension Expense

Total Pension Expense

0002-00AITKIN COUNTY $0 $1,996,546 $0 $0 $1,996,546 $548,537 $0 $548,5370006-00ANOKA COUNTY $0 $21,197,911 $0 $0 $21,197,911 $5,823,973 $0 $5,823,9730008-01BECKER COUNTY $0 $2,716,216 $0 $0 $2,716,216 $746,261 $0 $746,2610010-00BELTRAMI COUNTY $0 $3,108,418 $0 $0 $3,108,418 $854,015 $0 $854,0150012-00BENTON COUNTY REVENUE $0 $2,241,513 $0 $0 $2,241,513 $615,840 $0 $615,8400014-00BIG STONE COUNTY $0 $621,937 $0 $0 $621,937 $170,873 $0 $170,8730016-00BLUE EARTH COUNTY $0 $4,447,487 $0 $0 $4,447,487 $1,221,915 $0 $1,221,9150018-00BROWN COUNTY $0 $2,278,322 $0 $0 $2,278,322 $625,952 $0 $625,9520020-00CARLTON COUNTY $0 $3,402,886 $0 $0 $3,402,886 $934,918 $0 $934,9180022-00CARVER COUNTY $0 $7,050,739 $0 $0 $7,050,739 $1,937,140 $0 $1,937,1400022-09CARVER COUNTY HISTORICAL SOCIETY $0 $33,001 $0 $0 $33,001 $9,067 $0 $9,0670024-00CASS COUNTY $0 $2,832,988 $0 $0 $2,832,988 $778,343 $0 $778,3430026-00CHIPPEWA COUNTY $0 $1,228,644 $0 $0 $1,228,644 $337,561 $0 $337,5610027-00CHIPPEWA COUNTY SWCD $0 $33,001 $0 $0 $33,001 $9,067 $0 $9,0670028-00CHIPPEWA COUNTY HOSPITAL $0 $3,268,345 $0 $0 $3,268,345 $897,954 $0 $897,954

3602-00CITY OF BROOKLYN CENTER $0 $1,763,002 $0 $0 $1,763,002 $484,372 $0 $484,372…… … … … … … … … …

Total Allocated $0$1,269,260,0

00 $0 $0$1,269,260,0

00 $348,720,000 $0 $348,720,000

Total Actuarial Valuation Amounts $0$1,269,260,0

00 $0 $0$1,269,260,0

00 $348,720,000 $0 $348,720,000


PERA GASB 68 ReconciliationFor Fiscal Year Ended June 30, 2014

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Pension Expense Change in NPL during measurement period +/- deferrals

Source of Change in NPL Expense/Deferral

Service (Normal) Cost Immediate

Interest on the TPL Immediate

Projected Investment Earnings Immediate

Changes in Benefit Provisions Immediate

Actuarial Gains and Losses Expense over average remaining service lives of all active and in-active employees

Changes in Actuarial Assumptions

Changes in Proportionate Share

Differences between Projected and Actual Investment Earnings

Expense over 5-year closed period

Other Changes in the NPL Immediate

14


City of Brooklyn Center GASB 68 ReconciliationFor the Measurement Period Ended June 30, 2014

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City of Brooklyn CenterGeneral Employees Retirement FundReconciliation of Beginning Net Pension Liabiliity to Ending Net Pension Liability(Dollars in Thousands)

Plan NPL

Plan Deferred Outflows

Plan Deferred Inflows

City's Share @ 0.1389 %

City's Share of Plan Deferred

Outflows (Amortization

Period of 4 Years)

City's Share of Other Plan Deferred Inflows

(Amortization Period 4 Years)

City's Share Share of Plan Deferred

Inflows Asset Gain (Loss)

(Amortization Period of 5 Years)

Pension Expense

0.001389 4 4 5Balance at the Beginning of the Year $5,444,074 $7,562Changes for the Year:

Service Cost $388,391 $539 $539Interest on Total Pension Liability $1,591,756 $2,211 $2,211Interest on Fiduciary Net Position $1,174,279 $1,631 $1,631Changes in Benefit Terms $0 $0Liability Experience Gains and Losses $96,123 $72,092 $134 $100 $33Changes in Assumptions $645,499 $484,124 $897 $672 $224Contributions - Employer $382,251 $530.947 $0Contributions - Employees $334,495 $465 $465Asset Gain (Loss) $1,586,575 $1,269,260 $2,204 $1,763 $441Benefit Payouts $0 $0Administrative Expenses $9,861 $14 $14Other $605 $1 $1

Net Changes $746,575 $556,216 $1,269,260 $1,037 $773 $0 $1,763 $484Balance End of the Year $4,697,499 $556,216 $1,269,260 $6,525 $773 $0 $1,763 $484


Example of Deferred Inflows/Outflows Amortization Schedule

16

City of Brooklyn CenterAmortization of Deferred Inflows and Outflows of Resources Related to PensionsGeneral Employees Retirement FundFor the Year Ended December 31, 2014

City's Proportionate Share of Deferred

Inflows and Outflows

Amortization Year 1, 2014

ExpensedRemaining

Deferred Amounts Amortization Year 2, 2015




Total Amortization

Years 2 through 5

Differences between expected and actual economic experience $133,515 $33,379 $100,136 $33,379 $33,379 $33,379 $0 $100,136

Changes in actuarial assumptions $896,597 $224,149 $672,448 $224,149 $224,149 $224,149 $0 $672,448

Difference between projected and actual investment earnings $2,203,753 $440,751 $1,763,002 $440,751 $440,751 $440,751 $440,751 $1,763,002

Changes in proportion (N/A in 2014) $0 $0 $0 $0 $0 $0 $0Yearly impact on pension expense $183,223 $183,223 $183,223 $183,223 $440,751


Example of Deferred Inflows/Outflows Investment Earnings Amortization Schedule

City of Brooklyn CenterIncrease (Decrease) in Pension Expense Arising from the Recognition of Differences

between Projected and Actual Earnings on Pension Plan Investments

Year Plan

Difference between Projected and Actual Earnings on Investments

Amort-ization Period (Years) 2014 2015 2016 2017 2018 2019

2014 GERF

($2,203,755) 5 ($440,751) ($440,751) ($440,751) ($440,751) ($440,751)2015 GERF $2,500,000 5 - $500,000 $500,000 $500,000 $500,000 $500,00020162017

Net Increase (Decrease) in Pension Expense

($440,751) $59,249

17


GASB 71Amends paragraph 137 of GASB 68

Contributions after the measurement date prior to fiscal year end booked to deferred outflows rather than pension expense

At the beginning of the period in which the provisions of Statement 68 are adopted the government should recognize a beginning deferred outflow of resources only for its pension contributions

18


Transition Year Journal Entries

City of Brooklyn Center example: employer contributions expensed during initial measurement period are reclassified

6/30/2014 12/31/201412/31/2013

City’s Fiscal Year End Reporting Date

City’s Prior Fiscal Year End

Measurement Period

Beginning NPL

$7,561,819

PERA Contributions

$260,770

19

6/30/2013

Measurement Date


Transition Year Journal Entries

20

City of Brooklyn Center:

1) Net position $7,561,819

Net pension liability $7,561,819

Prior period adjustment to recognize beginning net pension liability as of July 1, 2014, for change in accounting principle.

2) Deferred outflows of resources $260,770

Net position $260,770

Prior period adjustment to reclassify pension contributions during the measurement period (July 1, 2013 through December 31, 2013), which had been closed to net position for the year ended December 31, 2013, as deferred outflows of resources.


21

Year-End Journal Entries1 Net Pension Liability $506,046

Deferred Outflows $772,584

Deferred Inflows $1,763,002

Pension Expense $484,372

To record NPL, Deferred Outflows, Deferred Inflows and Pension Expense as of the measurement date (6/30/2014).

2 Deferred Outflow -

Pension Expense -

Net Pension Liability -

Deferred Inflow -

To record the change in proportionate share from prior measurement date to current measurement date. This journal entry recognizes the change in proportion between measurement periods and applies the difference to NPL.

3 Net Pension Liability $528,666

Deferred Outflow $528,666

To reclassify 7/1/13 through 6/30/14 contributions


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Year-End Journal Entries

4 Pension Expense -

Deferred Outflow -

To amortize the change in proportionate share from prior valuation to current valuation.

5 Pension Expense -

Grant Revenue -

To recognize proportionate share of State of Minnesota contribution (special funding situation).

6 Deferred Outflow of Resources $263,600

Cash (or Pension Expense) $263,600

To recognize contributions made from 7/1/14 through 12/31/14.


23

Year-End Journal Entry T-Accounts (1 of 2)

City of Brooklyn Center

December 31, 2014 Reporting Period

Net Pension Liability Deferred Outflows Deferred Inflows Fringe Benefits Expense

2) $1,763,002 $7,561,819 1 T) 2 T) $260,770 $528,666 3) $1,763,002 2) 1) $263,600 $263,600 7)

3) $528,666 $772,584 2) 2) $772,584 $2,270 5)

5) $2,270 $484,372 2) 7) $263,600

$6,524,837 $766,018 $1,763,002

Pension Expense Cash Net Position

2) $484,372 $263,600 1) 1 T) $7,561,819 $260,770 2 T)

$484,372 $263,600

$7,301,049


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Year-End Journal Entry T-Accounts (2 of 2)

Transition year journal entries

1 T) Establish beginning NPL

2 T) Recognize deferred outflows for contributions closed to net position in the prior reporting period (7/1/13-12/31/13)

Annual journal entries

1) Recognize contributions from the measurement date to the end of the fiscal year (July 1, 2014, through December 31, 2014)

2) Recognize pension expense, deferred inflows and deferred outflows at the measurement date

3) Reclassify contributions made during the measurement period (July 1, 2013 through June 30,2014)

4) Change in proportionate share ($0 first year)

5) Difference in contributions used as the basis for the proportionate share allocation ($530,947) and contributions

that would be reported in the city's financial statements at the measurement date ($528,666) or $2,270.

This amount also is the city's proportionate share of the adjustments to total contributions as disclosed in the notes

to the GASB 68 schedules ($1,634,774*.001389 = $2,270).

6) Recognize pension expense for this year's amortization of prior year deferred inflows and outflows

of resources (n/a for the transition year)

7) Reclassify contributions after the measurement date (7/1/2014 through 12/31/2014)


Suggested GASB 68 Footnotes

25

Suggested GASB 68 Pension Footnotes for Employers Financial Statements for the Fiscal Year Ended December 31 Summary of Significant Accounting Policies Pensions. For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Note X. Defined Benefit Pension Plans [Include information for the specific plans that apply to your entity] A. Plan Description

The [entity] participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401 (a) of the Internal Revenue Code. 1. General Employees Retirement Fund (GERF)

All full-time and certain part-time employees of the [entity’s name] are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan.


RSI Schedule of Employer’s Proportionate Share of the Net Pension Liability

Ten-year schedule presenting, by plan:Employer’s proportion, both percentage and amount,

of the collective NPL

Employer’s covered-employee payroll as of the measurement date

Employer’s amount of the collective NPL as a percentage of covered-employee payroll

Plan’s fiduciary net position as a percentage of the total pension liability

26


27

Schedule of Proportionate Share of the Net Pension Liability

City of Brooklyn Center’s Proportionate Share of the Net Pension LiabilityPERA General Employees Retirement Fund

Required Supplementary Information (Last Ten Years*)

Fiscal Year Ending

Proportion (Percentage) of the Net Pension Liability (Asset)

Proportionate Share (Amount) of the Net

Pension Liability (Asset) (a)

Covered-Employee Payroll

(b)

Proportionate Share of the Net Pension

Liability (Asset) as a Percentage of its

Covered-Employee Payroll (a/b)

Plan Fiduciary Net Position as a

Percentage of the Total Pension

LiabilityJune 30, 2014 0.1389% $6,524,826 $7,430,645 87.8% 78.7%

* Schedule is to be provided prospectively beginning with the employer's fiscal year ended June 30, 2015, or after.


RSI Schedule of Employer Contributions

Ten year schedule, by plan:Statutorily required employer contributions

Actual contributions paid by employer

Difference between required and paid contributions

Amount of contributions paid in relation to required contributions as a percentage of the employer’s covered-employee payroll as of the reporting date

28


29

Schedule of Contributions

City of Brooklyn Center Schedule of ContributionsPERA General Employees Retirement FundRequired Supplementary Information (Last Ten Years*)

Fiscal Year Ended

Statutorily Required

Contribution (a)

Contributions in Relation to the

Statutorily Required

Contribution (b)

Contribution Deficiency

(Excess) (a-b)

Covered-Employee

Payroll (d)

Contributions as a Percentage of

Covered-Employee Payroll

(b/d)December 31, 2014 $528,666 $528,666 $0 $7,458,169 7.09%December 31, 2015December 31, 2016December 31, 2017December 31, 2018December 31, 2019December 31, 2020December 31, 2021December 31, 2022December 31, 2023

* Option to provide RSI for ten years at transition or to provide RSI prospectively.


Annual TimelineJune 30—Fiscal year end (Measurement Date)

August—Census and asset data sent to actuary

November—Actuarial valuations finalized

December 1—PERA prepares GASB schedules

January—Plan auditor finalizes GASB 68 audit

February 10—PERA publishes GASB schedules and audit report

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SummaryEvery year PERA will provide GASB 68 information

on its website (Financial Reporting Toolkit)Independent Auditor’s Report and Management LetterSchedule of Employer AllocationsSchedule of Pension Amounts by EmployerNotes to the pension allocation schedules

The June 30, 2014, pension allocation amounts were finalized August 24, 2015, for employers with a June 30 fiscal year end

Future GASB 68 schedules and audit opinion will be available in February each year

31


Allocating Pension Amounts to Proprietary/Fiduciary Funds

No allocation requirements in GASB 68

NCGA Statement 1, paragraph 42--long-term liabilities should be reported in Statement of Net Position (fiduciary net position) if:

Amount is material; liability is directly related to the fund; and liability is expected to be paid from the fund

See GASB 68 Implementation Guide Question 122 for cost-sharing plans and Question 36 for Single-Employer/Agent Plans

Will need to address changes in proportionate share within reporting entity

32


FIRE RELIEF ASSOCIATIONS

33


Fire Relief AssociationsOffice of the State Auditor’s June 2014 Pension

Division NewsletterCities that prepare financial statements in accordance

with GAAP need to include the NPL and pension expense of the affiliated relief association If amounts are material If the fire department is a city fire department (not an

independent non-profit firefighting corporation)Alternative to costly actuarial valuation—accept liability

amounts calculated using State Auditor’s annual Schedule Form if difference is not significant

34


Single-Employer/Agent PlansIn contrast to cost-sharing plans, single-

employer/agent plans have:

Fewer footnote disclosures

One additional footnote schedule

Schedule of Changes in the Net Pension Liability

One additional RSI schedule

Ten-year Schedule of Changes in the Net Pension Liability

The Ten-year Schedule of Net Pension Liability and Schedule of Changes in Net Pension Liability can be combined.

35


Fire Relief AssociationsMost relief associations are overfunded, so NPL will

be a Net Pension Asset.

PERA will provide cities/townships whose fire departments have joined PERA’s Statewide Volunteer Firefighter Retirement Plan with GASB 68 schedules.

The RSI Schedule of Required Contributions is only applicable to fire relief associations that paid statutorily-required contributions.

36


American Institute of CPAs® Governmental Audit Quality Center

Cost-Sharing Plans: Employer Responsibilities

• Complete and accurate census data to plan

• Appropriateness of information used to record financial statement amounts

• Whether plan auditor’s report on schedules are adequate and appropriate for employer purposes

• Amounts in schedules specific to employer

• employer amount used in allocation percentage (numerator)

• recalculate allocation percentage of employer• recalculate allocation of pension amounts

based on allocation percentage of employer

Report

Evaluate

Verify & Recalculate

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American Institute of CPAs®

38Governmental Audit Quality Center

Cost-Sharing Plans: Employer Auditor Responsibilities

• Sufficiency and appropriateness of audit evidence

• Whether plan auditor’s report on schedules are adequate and appropriate for auditor purposes (e.g., evidence)

• Review plan auditor’s report and any related modifications

• Evaluate whether plan auditor has necessary competence and independence

• Determine whether named as specified user

• Amounts in schedules specific to employer• Employer amount used in allocation percentage

(numerator)• Recalculate allocation percentage of employer• Recalculate allocation of pension amounts based on

allocation percentage of employer

• Census data submitted to plan

Determine

Evaluate

Verify & Recalculate

Test


More Information

PERA’s website• www.mnpera.org• Employers tab• GASB 68 Public Pension Accounting Standards

Contact Jim Riebe at [email protected]

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public employees retirement association of minnesota gasb 68 implementation september 24, 2015...

Documents

pension information

collective pension amounts

outflows pension expense

information pera

information employers

employers contributions

years of information

deferred inflows of