The Governmental Accounting Standards Board (GASB), an independent organization that is a component of the Financial Accounting Foundation, establishes the Generally Accepted Accounting Principles (GAAP) for state and local governments in the U.S., including their retirement systems. GASB standards are not federal laws or regulations and the organization is not an enforcement authority. Compliance with GASB’s standards, however, is enforced through the statutes of many states and cities, as well as the audit process, when auditors render opinions on the fairness of financial statement presentations in conformity with GAAP.
Many state and local retirement systems publish annual comprehensive financial reports, in compliance with the Government Finance Officers Association's Certificate of Achievement for Excellence in Financial Reporting Program. Such reports include investment and actuarial information in addition to GAAP-based financial statements on which an independent auditor expressed an unqualified opinion.
Beginning in 1994, GASB statements 25 and 27 provided accounting and reporting guidance for public retirement systems and public employers that sponsor a pension plan. GASB reviewed these statements beginning in 2006 and completed updated standards for implementation by retirement systems with a fiscal year ending after 6/15/2013 and by employers that sponsor a pension plan with a fiscal year ending after 6/15/2014. These new standards are Statement 67, Financial Report for Pension Plans, and Statement 68, Accounting and Financial Reporting for Pensions.
In addition to financial reporting, typical public retirement system accounting responsibilities include contribution accounting and reporting, internal accounting, investment accounting, and auditing.
GASB Statement No. 67 is a revision to Statement No. 25. Statement 67 requires defined benefit pension plans to prepare two financial statements - a statement of fiduciary net position and a statement of changes in fiduciary net position.
GASB Statement No. 68 is a revision to Statement No. 27 and makes changes to the valuation of pension plan liabilities. The statement requires changes to the way liabilities are calculated for the long-term investment assumptions that can be used to discount them over time. GASB 68 also makes changes to the way annual pension expenses are calculated and reported.
NASRA Resolution 2022-01: Public Employee Retirement System Accounting Standards & Actuarial Methodologies
Public Pension Reporting and Disclosure: The Current State of Practice and Examples of What Works Well, Center for State & Local Government Excellence and NASRA
GASB 68: How Will State Unfunded Pension Liabilities Affect Big Cities?, Center for Retirement Research, January 2016
Retirement System CAFR Preparation Checklist, Government Finance Officers Association
Publications and Resources, Association of Public Pension Fund Auditors
GASB Implementation Resources including guides, webinars, reports, analyses, etc.