Public Employee Forum on GASB Statement 45
 

 

 


Public Employee Forum on GASB Statement 45

Wednesday, February 7, 2007

Holiday Inn Capitol Hill

1:00 p.m. – 5:00 p.m.



Background

In 2004, the Governmental Accounting Standards Board (GASB) released Statement 45 (GASB 45) concerning health and other non-pension benefits for retired public employees. These benefits, also known as other post-employment benefits, along with retiree health care programs, are by far the most costly for employers.

The intent of GASB 45 is to bring governmental accounting standards more in line with private company standards. In general, all public sector employers offering post-employment benefits -- other than pensions -- will be required to reflect the costs of those benefits in their financial statements. This new requirement could drive municipalities to propose cuts that would adversely affect the financial health and well-being of IAFF members.

GASB Statement 45 creates challenges for IAFF affiliates who will likely be faced with employer proposals to reduce post-employment benefit liabilities by:

  • Lowering the level of retiree health care benefits granted
  • Offering new employees (or new retirees) a reduced benefit level
  • Placing a cap on total OPEB employer provided benefits