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Statement No. 5
Disclosure of Pension Information by Public Employee Retirement Systems and State and Local Governmental Employers
STATUS
Issue Date: November 1986
Effective Date: Financial reports issued for fiscal years beginning after December 15, 1986
Affects: Amends GASBS 4, paragraph 11
Amends NCGAS 1 concerning required supplementary information (principle 12 and paragraphs 128, 129, 137, 139, 144, and 167)
Supersedes NCGAS 6, paragraphs 5 through 21
Supersedes NCGAS 6, Appendix B
Amends NCGAS 7, paragraphs 7, 8, 15, and 25
Amends NCGAI 6, paragraphs 4 and 5 and Appendix
Amends AICPA SOP 80-2, paragraph 4
Affected by: Paragraphs 1 and 2 amended by GASBS 25, ¶8-¶13
Paragraphs 14 through 16 superseded by GASBS 25, ¶32-¶40
Paragraphs 18 through 25 superseded by GASBS 25, ¶32-¶40
Paragraphs 30 through 33 (except for footnotes 5-7 and 10) superseded by GASBS 25, ¶32-¶40
Paragraph 35 amended by GASBS 24, ¶12
Paragraph 35f superseded by GASBS 25, ¶37-¶40
Footnote 11 amended by GASBS 24, ¶12 and GASBS 25, ¶37-¶40
Footnote 12 amended by GASBS 25, ¶17
Paragraph 36 amended by GASBS 25, ¶37-¶40
Footnote 15 superseded by GASBS 25, ¶37-¶40
Paragraphs 37 and 38 superseded by GASBS 25, ¶32
Paragraph 39 amended by GASBS 24, ¶12
Paragraph 39i superseded by GASBS 25, ¶37-¶40
Paragraph 40 amended by GASBS 14, ¶11 and ¶63
Paragraph 41 amended by GASBS 24, ¶12
Paragraph 46 superseded by GASBS 25, ¶41
Paragraph 47 amended by GASBS 24, ¶12
Appendix B, Illustration 1, superseded by GASBS 25, ¶153
Appendixes C and D superseded by GASBS 25, ¶32-¶40
All remaining paragraphs and appendixes will be superseded by GASBS 27
Primary Codification Section Reference: P20
Abbreviations for Accounting Pronouncements
GASBS - GASB Statements
GASBI - GASB Interpretations
GASBTB - GASB Technical Bulletins
GASBCS - GASB Concepts
BFC - Basis for Conclusions
NCGAS - NCGA Statements
NCGAI - NCGA Interpretations
SOP - AICPA Statements of Position
ASLGU - AICPA Audit Guide
SUMMARY
This Statement establishes standards for disclosure of pension information by public employee retirement systems (PERS) and state and local governmental employers in notes to financial statements and in required supplementary information. It standardizes pension disclosure guidance by superseding the pension disclosure requirements of paragraph 9 of GASB Statement No. 1,
Authoritative Status of NCGA Pronouncements and AICPA Industry Audit Guide.
The disclosures required by this Statement are intended to provide information needed to assess (a) funding status of a PERS on a going-concern basis, (b) progress made in accumulating sufficient assets to pay benefits when due, and (c) whether employers are making actuarially determined contributions.
Disclosures are required both in financial reports issued by PERS and in financial reports issued by employers, including those that do not fund their pension obligations. In addition to disclosures about plan provisions, actuarially determined contribution requirements, contributions actually made, and significant actuarial assumptions, this Statement requires the computation and disclosure of a standardized measure of the pension obligation. That measure, which may differ from that produced by the actuarial funding method used to determine contribution requirements, is the actuarial present value (APV) of credited projected benefits prorated on service: it considers both salary progression and step-rate benefits. It is referred to in this Statement as the "pension benefit obligation." An actuarial valuation to calculate this measure should be made at least once every two years, with an update in years when a full valuation is not performed.
Ten-year trend information should also be presented as required supplementary information. This information includes comparisons of (a) net assets available for benefits to the pension benefit obligation, (b) unfunded pension benefit obligation to annual covered payroll, and (c) revenues by source to expenses by type. Employers may make reference to the availability of 10-year trend information in publicly available PERS reports or in their own comprehensive annual financial reports (CAFR) rather than present the information with their general purpose financial statements (GPFS).
For purposes of this Statement, PERS are categorized as single-employer, agent multiple-employer, and cost-sharing multiple-employer. Employers are required to disclose only summary information about their participation in cost-sharing multiple-employer PERS.
Small PERS and small employers (as defined in the Statement) may disclose the actuarial accrued liability developed from certain specified actuarial funding methods, instead of the standardized measure of the pension obligation required of larger entities. These smaller entities are also exempted from the requirement for actuarial updates.
Guidance is also provided on disclosure of information on defined contribution pension plans.
Unless otherwise specified, pronouncements of the GASB apply to financial reports of all state and local governmental entities, including public benefit corporations and authorities, public employee retirement systems, and governmental utilities, hospitals, colleges, and universities.
Copyright by Governmental Accounting Standards Board. All Rights Reserved. Used by Permission.
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