Proposed GASB Changes Fact Sheet
Californians for Retirement Security
The Governmental Accounting Standards Board (GASB) is a private panel that creates accounting and public reporting rules for state and local governments. As part of a standard 10-year review, GASB is considering new bookkeeping rules for pension funds. These changes will not alter policies, investments or the health of pension funds. Instead, they will amount to a new set of accounting rules that will create confusion, bog down pension administrators with new bureaucratic obligations and strap already financially ailing state and local jurisdictions and districts with untold new costs. These changes, meanwhile, will produce a new crop of figures for critics to hold up to claim pension funds are in dire fiscal straits and to inflame an already hostile environment toward public workers who are under siege nationwide.
Why Should Public Employees Care?
These changes likely will result in new costs to public agencies, public employees and, ultimately, taxpayers. Although the changes may seem mundane, they are anything but. CalPERS and CalSTRS say they will face millions of dollars in new staffing costs and expenses under the new rules. They warn that employers - cities, local districts and school districts - could be forced to pay an outside actuary or reimburse them for the additional work required by the new rules. These are the same agencies already searching for ways to cut budgets and seeking concessions from employees. Local government agencies’ ability to issue bonds also could be jeopardized if they cannot comply with the onerous new tasks required.
These changes will further erode the perception of public employees. The numbers that will emerge from the new standards – although simply that: a second set of numbers – are likely to result in confusion by the public and abuse by pension busters. Some pension critics already are characterizing these changes as tools to provide “transparency,” as they lick their chops for new ammunition in their politically driven attacks on retirement security for public employees.
Imagine being suddenly required to change the way you keep your personal books, forcing you to hire an accountant, altering your financial portrait for potential lenders and heaping new burdens and expenses on you during already financially uncertain times. National Association of State Retirement Administrators calls the proposed GASB changes “equivalent to an individual needing to report on a finance statement, not his or her monthly mortgage payment, but the entire outstanding home mortgage, including interest, so that the debt-to-asset ratio is drastically changed.” It makes little sense for a family, or for government.
What can Public Employees Do?
Pension Dialog Blog Article
National Association of State Retirement Administrators and National Council on Teacher Retirement Statement
Calpensions.com Article on GASB