Study offers tips on GASB 45 compliance

The Washington-based National Association of Counties (NACo) has released a study of the steps counties are taking to comply with the Norwalk, Conn.-based Government Accounting Standards Board’s (GASB) Statement 45, which requires local governments to account for other post-employment benefits (OPEBs), such as health care for retirees. NACo aims to use the study to alleviate confusion about GASB 45. “The Implementation of GASB 45: Case Studies of 15 Counties,” presents issues surrounding the rule as well as specifics on how counties are meeting the challenge. It also lists pros and cons to complying with GASB 45. The study is available at www.naco.org.

GASB 45 pros:

• Promotes transparency and accountability by requiring the full costs of OPEBs be disclosed to the public.

• Forces a discussion of how much state and local governments spend on health care benefits and a reevaluation of retiree benefits.

• Encourages government officials to make long-term plans.

GASB 45 cons:

• Some government officials say the new standards are not appropriate or necessary.

• Groups retirees together with current workers to determine an average insurance premium rate, which some say is inaccurate because retirees are not paid directly.

• Future health care costs may be too difficult to predict.