Updates
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The Governmental Accounting Standards Board (GASB) released new accounting standards for public sector postretirement benefit programs and the employers that sponsor them. The new standards replace Statements Nos. 43 and 45, and follow many of the same guidelines implemented under GASB 67 and 68 for pensions.
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The new accounting standards for public sector retirement plans and systems adopted by the Governmental Accounting Standards Board (GASB) in June of 2012 began to become effective in 2014. The new standards amend Statements Nos. 25 and 27, and have been developed over the past four years with significant input from the public and professional communities. The new standards, which require balance sheet recognition of unfunded obligations, were developed with the focus of accounting requirements only, and encourage sponsors to develop funding and contribution policies independently.
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On July 6th the Moving Ahead for Progress in the 21st Century Act (MAP-21) was enacted. This legislation, which primarily addresses student loan and transportation issues, also included important pension provisions. These provisions provide significant funding relief, at least for the next two years, by requiring the interest rates for minimum funding purposes to be within certain ranges of 25 year average corporate bond rates.
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The Governmental Accounting Standards Board (GASB) has issued preliminary views on accounting for pension plans in the governmental sector. If incorporated in new standards, the views will result in significant changes in pension accounting practices. After the April 2011 meeting, a June 2011 Exposure Draft release date was set, with implementation scheduled for reporting periods beginning after June 15, 2012 for large, single employers and June 15, 2013 for all others.
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Employers considering the election of pension funding relief under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, finally have guidance in Notice 2011-3 which will be published by the IRS in Internal Revenue Bulletin 2011-2 on January 10, 2011
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A potential new era for employer sponsored health care benefits arrived at the end of March. Changes in benefit levels, eligibility and taxes will guarantee an eventful five years or more.
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Congress passes economic relief and technical corrections bill.
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The Pension Protection Act of 2006 (PPA) changed funding rules for employer sponsored defined benefit plans. These rules were modified further by the Worker, Retiree and Employer Recovery Act of 2008 (WRERA). The Regulations issued by the IRS on October 15, finalize and modify proposed Regulations issued in 2007 and 2008, and clarify interim IRS guidance.
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On March 31, in a Special Edition of its Employee Plans News, the IRS issued guidance on the selection of the corporate bond yield curve for determining defined benefit plan funding liabilities.
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