public employees retirement association of minnesota gasb 68 implementation september 24, 2015...
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Public Employees Retirement Association of Minnesota
GASB 68 Implementation
September 24, 2015
Presented by: Dave DeJonge, PERA Interim Executive Director, and
Jim Riebe, PERA Principal Accounting Officer
2015 MNGFOA Annual Conference
Alexandria, Minnesota1
Public Employees Retirement Association of Minnesota
Session ObjectivesAt the completion of this session, participants will:
Know where to find and how to use the GASB 68 information PERA has prepared for employers.
Be able to prepare: Journal entries to incorporate pension amounts into government-
wide financial statements; Extensive employer pension footnote disclosures; and Two required supplementary information pension schedules.
Understand: Requirements for fire relief associations and the information PERA
will provide for the Statewide Volunteer Firefighters Plan; How to account for pension amounts in proprietary funds; and Employer’s and employer auditor’s responsibilities for the pension
information provided by PERA.
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Public Employees Retirement Association of Minnesota
GASB 68 Overview (1 of 2)Employers report their proportionate share of collective
net pension liability, deferred inflows of resources and deferred outflows of resources, and pension expense on their government-wide financial statementsGASB 67/68 pension amounts calculated by PERA’s actuary
Pension expense calculated as change in net pension liability during the year, plus or minus amortization of deferred inflows and outflows
Pension expense no longer based on contributions to the plan
Employer’s proportionate share calculated by PERA based on employer’s contributions at the measurement date as a percentage of plan contributions from all employers
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Public Employees Retirement Association of Minnesota
GASB 68 Overview (2 of 2)
Significantly more footnote disclosuresDisclosures required for each plan
PERA will provide suggested footnote templates
Required supplementary information Ten-year Schedule of Employer’s Proportionate Share of the
Net Pension Liability (prospectively applied)
Ten-year Schedule of Employer Contributions (option to provide ten years of information at transition or to apply requirement prospectively)
Municipalities affiliated with fire relief associations need to prepare a Ten-Year Schedule of Changes in the Net Pension Liability
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Public Employees Retirement Association of Minnesota
Financial Reporting Toolkit (1of 2)
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Public Employees Retirement Association of Minnesota
Financial Reporting Toolkit (2 of 2)
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Public Employees Retirement Association of Minnesota
GASB 67/68 Actuarial Information
Gabriel, Roeder, Smith prepares two valuation reports for each planGASB 67/68 compliant valuation
Funding valuation
Use GASB 67/68 report to verify collective
pension amounts, NPL +/- 1% sensitivity
analysisGASB 67/68 valuation includes a NPL reconciliation
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Public Employees Retirement Association of Minnesota
City of Brooklyn CenterGASB 68 Implementation
Case StudyThis case study is provided for illustration purposes only as if the city early-implemented GASB 68 for the year ended December 31, 2014. The GASB 68 information employers will use for their December 31, 2015, financial statements will not be available until February 2016.
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Public Employees Retirement Association of Minnesota
Schedule of Employer Allocations
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Schedule of Employer Allocations (General Employees Retirement Fund)As of June 30, 2014
Employer Unit No. Employer Name Contributions Allocation %
0002-00 AITKIN COUNTY $598,540 0.1573%0006-00 ANOKA COUNTY $6,356,610 1.6701%0008-01 BECKER COUNTY $814,665 0.2140%0010-00 BELTRAMI COUNTY $932,224 0.2449%0012-00 BENTON COUNTY REVENUE $672,279 0.1766%0014-00 BIG STONE COUNTY $186,634 0.0490%0016-00 BLUE EARTH COUNTY $1,333,636 0.3504%0018-00 BROWN COUNTY $683,227 0.1795%0020-00 CARLTON COUNTY $1,020,241 0.2681%0022-00 CARVER COUNTY $2,114,127 0.5555%0022-09 CARVER COUNTY HISTORICAL SOCIETY $9,979 0.0026%0024-00 CASS COUNTY $849,624 0.2232%0026-00 CHIPPEWA COUNTY $368,518 0.0968%0027-00 CHIPPEWA COUNTY SWCD $9,983 0.0026%0028-00 CHIPPEWA COUNTY HOSPITAL $980,100 0.2575%0030-00 CHISAGO COUNTY $1,051,266 0.2762%3602-00 CITY OF BROOKLYN CENTER $528,555 0.1389%
… … … …
Total Employer Contributions $380,612,334 100.0000%
Public Employees Retirement Association of Minnesota
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PERA Contributions ReconciliationPublic Employees Retirement Association of Minnesota
General Employees Retirement PlanReconciliation of Employer Proportionate Share Contributions to Employer Financial Statement Contributions
For the Year Ended June 30, 2014
YE 2013 YE 2014 Subtotal Subtotal Total
Employer Unit No. Employer Name
Employer Contributions - Matching
(6.25 or 6.5%)
Employer Contributio
n - Additional
(1%)
Adjustment for Employer Accrual
(Received in Current FY but Recognized in
Prior FY)
Adjustment for Employer
Accrual (Received in
Future FY but Recognized in Current FY)
Employer Contributions Allocated for
GASB 68
Employer Contributions NOT Allocated for GASB
68 (Omitted Deductions,
Member Buybacks, Employer Portion Paid by Employee,
Interest)
Employer Contributions
Amount Reported on
CAFR
0002-00 AITKIN COUNTY $535,331 $85,649 $22,440 $598,540 $0 $598,540
0006-00 ANOKA COUNTY $5,477,764 $876,443 $241,438 $243,840 $6,356,610 $358 $6,356,968
0008-01 BECKER COUNTY $702,298 $112,368 $814,665 $316 $814,981
0010-00 BELTRAMI COUNTY $803,641 $128,583 $932,224 $0 $932,224
0012-00 BENTON COUNTY REVENUE $579,551 $92,728 $672,279 $0 $672,279
0014-00 BIG STONE COUNTY $160,891 $25,742 $186,634 $0 $186,634
0016-00 BLUE EARTH COUNTY $1,149,687 $183,949 $1,333,636 $0 $1,333,636
0018-00 BROWN COUNTY $588,987 $94,239 $683,227 $0 $683,227
0020-00 CARLTON COUNTY $911,429 $146,045 $37,233 $1,020,241 $21 $1,020,262
0022-00 CARVER COUNTY $1,822,526 $291,601 $2,114,127 $471 $2,114,598
0022-09 CARVER COUNTY HISTORICAL SOCIETY $8,602 $1,376 $9,979 $0 $9,979
0024-00 CASS COUNTY $732,436 $117,188 $849,624 $0 $849,624
0026-00 CHIPPEWA COUNTY $316,500 $50,640 $14,070 $15,447 $368,518 $0 $368,518
0027-00 CHIPPEWA COUNTY SWCD $8,903 $1,424 $344 $9,983 $0 $9,983
0028-00 CHIPPEWA COUNTY HOSPITAL $844,917 $135,183 $980,100 $0 $980,100
0030-00 CHISAGO COUNTY $904,938 $144,792 $39,567 $41,102 $1,051,266 $2,958 $1,054,224
… … … … … … … … …
3602-00 CITY OF BROOKLYN CENTER $473,269 $75,723 $20,437 $528,555 $111 $528,666
… … … … … … … … …
Total All Employers$329,397,17
1$52,701,18
3 $9,163,798 $8,522,223$381,456,77
8 $794,328$382,251,10
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Public Employees Retirement Association of Minnesota
Schedule of Pension Amounts by Employer (1 of 2)
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Public Employees Retirement Association General Employees Retirement PlanSchedule of Pension Amounts by EmployerFiscal Year Ended June 30, 2014
Deferred Outflow of Resources
Employer Unit ID No. Employer Name
Beginning Net Pension
Liability (NPL)
Ending Net Pension Liability (Single
Discount Rate
Assumption 7.90%)(NPL)
Sensitivity of Ending Net
Pension Liability to
1% Decrease in Single
Rate Assumption
(6.90%)
Sensitivity of Ending Net
Pension Liability to 1% Increase
in Single Rate
Assumption (8.90%)
Differences Between Expected
and Actual Economic
Experience
Difference Between Projected and Actual Investment Earnings
Changes in Actuarial
Assumptions
Changes in Proportion
and Differences
Between Employer
Contributions and
Proportionate Share
of Contributio
ns
Total Deferred
Outflows of Resources
0002-00 AITKIN COUNTY $8,563,528 $7,389,166 $11,911,634 $3,668,239 $113,401 $0 $761,527 $0 $874,9280006-00 ANOKA COUNTY $90,921,480 $78,452,931 $126,469,291 $38,946,765 $1,204,008 $0 $8,085,355 $0 $9,289,3630008-01 BECKER COUNTY $11,650,318 $10,052,648 $16,205,274 $4,990,484 $154,277 $0 $1,036,025 $0 $1,190,3020010-00 BELTRAMI COUNTY $13,332,537 $11,504,175 $18,545,195 $5,711,073 $176,553 $0 $1,185,620 $0 $1,362,1730012-00 BENTON COUNTY REVENUE $9,614,235 $8,295,783 $13,373,137 $4,118,316 $127,314 $0 $854,963 $0 $982,2770014-00 BIG STONE COUNTY $2,667,596 $2,301,775 $3,710,553 $1,142,681 $35,325 $0 $237,221 $0 $272,5460016-00 BLUE EARTH COUNTY $19,076,035 $16,460,036 $26,534,243 $8,171,335 $252,610 $0 $1,696,370 $0 $1,948,9810018-00 BROWN COUNTY $9,772,113 $8,432,011 $13,592,742 $4,185,944 $129,405 $0 $869,003 $0 $998,4080020-00 CARLTON COUNTY $14,595,562 $12,593,995 $20,302,028 $6,252,097 $193,279 $0 $1,297,936 $0 $1,491,2150022-00 CARVER COUNTY $30,241,831 $26,094,607 $42,065,560 $12,954,271 $400,471 $0 $2,689,309 $0 $3,089,7800022-09 CARVER COUNTY HISTORICAL SOCIETY $141,546 $122,135 $196,887 $60,632 $1,874 $0 $12,587 $0 $14,4620024-00 CASS COUNTY $12,151,173 $10,484,818 $16,901,949 $5,205,028 $160,909 $0 $1,080,565 $0 $1,241,4740026-00 CHIPPEWA COUNTY $5,269,864 $4,547,179 $7,330,236 $2,257,378 $69,785 $0 $468,632 $0 $538,4170027-00 CHIPPEWA COUNTY SWCD $141,546 $122,135 $196,887 $60,632 $1,874 $0 $12,587 $0 $14,4620028-00 CHIPPEWA COUNTY HOSPITAL $14,018,491 $12,096,060 $19,499,337 $6,004,905 $185,637 $0 $1,246,619 $0 $1,432,256
3602-00 CITY OF BROOKLYN CENTER $7,561,819 $6,524,826 $10,518,283 $3,239,151 $100,136 $0 $672,448 $0 $772,584… … … … … … … … … … …
Total Allocated$5,444,074,00
0$4,697,499,00
0$7,572,558,00
0$2,332,002,00
0 $72,092,000 $0$484,124,00
0 $0 $556,216,000
Total Actuarial Valuation Amounts$5,444,074,00
0$4,697,499,00
0$7,572,558,00
0$2,332,002,00
0 $72,092,000 $0$484,124,00
0 $0 $556,216,000
Public Employees Retirement Association of Minnesota
Schedule of Pension Amounts by Employer (2 of 2)
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Public Employees Retirement Association General Employees Retirement PlanSchedule of Pension Amounts by EmployerFiscal Year Ended June 30, 2014
Deferred Inflows of Resources Pension Expense
Employer Unit ID
No. Employer Name
Differences Between Expected
and Actual Economic
Experience
Difference Between Projected and Actual Investment Earnings
Changes in Actuarial
Assumptions
Changes in Proportion
and Differences
Between Employer
Contributions and
Proportionate Share of Contributio
ns
Total Deferred Inflows of Resources
Proportionate Share of
Plan Pension Expense
Net Amortizatio
n of Deferred Amounts
from Changes in Proportion
and Proportionate Share of
Pension Expense
Total Pension Expense
0002-00AITKIN COUNTY $0 $1,996,546 $0 $0 $1,996,546 $548,537 $0 $548,5370006-00ANOKA COUNTY $0 $21,197,911 $0 $0 $21,197,911 $5,823,973 $0 $5,823,9730008-01BECKER COUNTY $0 $2,716,216 $0 $0 $2,716,216 $746,261 $0 $746,2610010-00BELTRAMI COUNTY $0 $3,108,418 $0 $0 $3,108,418 $854,015 $0 $854,0150012-00BENTON COUNTY REVENUE $0 $2,241,513 $0 $0 $2,241,513 $615,840 $0 $615,8400014-00BIG STONE COUNTY $0 $621,937 $0 $0 $621,937 $170,873 $0 $170,8730016-00BLUE EARTH COUNTY $0 $4,447,487 $0 $0 $4,447,487 $1,221,915 $0 $1,221,9150018-00BROWN COUNTY $0 $2,278,322 $0 $0 $2,278,322 $625,952 $0 $625,9520020-00CARLTON COUNTY $0 $3,402,886 $0 $0 $3,402,886 $934,918 $0 $934,9180022-00CARVER COUNTY $0 $7,050,739 $0 $0 $7,050,739 $1,937,140 $0 $1,937,1400022-09CARVER COUNTY HISTORICAL SOCIETY $0 $33,001 $0 $0 $33,001 $9,067 $0 $9,0670024-00CASS COUNTY $0 $2,832,988 $0 $0 $2,832,988 $778,343 $0 $778,3430026-00CHIPPEWA COUNTY $0 $1,228,644 $0 $0 $1,228,644 $337,561 $0 $337,5610027-00CHIPPEWA COUNTY SWCD $0 $33,001 $0 $0 $33,001 $9,067 $0 $9,0670028-00CHIPPEWA COUNTY HOSPITAL $0 $3,268,345 $0 $0 $3,268,345 $897,954 $0 $897,954
3602-00CITY OF BROOKLYN CENTER $0 $1,763,002 $0 $0 $1,763,002 $484,372 $0 $484,372…… … … … … … … … …
Total Allocated $0$1,269,260,0
00 $0 $0$1,269,260,0
00 $348,720,000 $0 $348,720,000
Total Actuarial Valuation Amounts $0$1,269,260,0
00 $0 $0$1,269,260,0
00 $348,720,000 $0 $348,720,000
Public Employees Retirement Association of Minnesota
PERA GASB 68 ReconciliationFor Fiscal Year Ended June 30, 2014
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Public Employees Retirement Association of Minnesota
Pension Expense Change in NPL during measurement period +/- deferrals
Source of Change in NPL Expense/Deferral
Service (Normal) Cost Immediate
Interest on the TPL Immediate
Projected Investment Earnings Immediate
Changes in Benefit Provisions Immediate
Actuarial Gains and Losses Expense over average remaining service lives of all active and in-active employees
Changes in Actuarial Assumptions
Changes in Proportionate Share
Differences between Projected and Actual Investment Earnings
Expense over 5-year closed period
Other Changes in the NPL Immediate
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Public Employees Retirement Association of Minnesota
City of Brooklyn Center GASB 68 ReconciliationFor the Measurement Period Ended June 30, 2014
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City of Brooklyn CenterGeneral Employees Retirement FundReconciliation of Beginning Net Pension Liabiliity to Ending Net Pension Liability(Dollars in Thousands)
Plan NPL
Plan Deferred Outflows
Plan Deferred Inflows
City's Share @ 0.1389 %
City's Share of Plan Deferred
Outflows (Amortization
Period of 4 Years)
City's Share of Other Plan Deferred Inflows
(Amortization Period 4 Years)
City's Share Share of Plan Deferred
Inflows Asset Gain (Loss)
(Amortization Period of 5 Years)
Pension Expense
0.001389 4 4 5Balance at the Beginning of the Year $5,444,074 $7,562Changes for the Year:
Service Cost $388,391 $539 $539Interest on Total Pension Liability $1,591,756 $2,211 $2,211Interest on Fiduciary Net Position $1,174,279 $1,631 $1,631Changes in Benefit Terms $0 $0Liability Experience Gains and Losses $96,123 $72,092 $134 $100 $33Changes in Assumptions $645,499 $484,124 $897 $672 $224Contributions - Employer $382,251 $530.947 $0Contributions - Employees $334,495 $465 $465Asset Gain (Loss) $1,586,575 $1,269,260 $2,204 $1,763 $441Benefit Payouts $0 $0Administrative Expenses $9,861 $14 $14Other $605 $1 $1
Net Changes $746,575 $556,216 $1,269,260 $1,037 $773 $0 $1,763 $484Balance End of the Year $4,697,499 $556,216 $1,269,260 $6,525 $773 $0 $1,763 $484
Public Employees Retirement Association of Minnesota
Example of Deferred Inflows/Outflows Amortization Schedule
16
City of Brooklyn CenterAmortization of Deferred Inflows and Outflows of Resources Related to PensionsGeneral Employees Retirement FundFor the Year Ended December 31, 2014
City's Proportionate Share of Deferred
Inflows and Outflows
Amortization Year 1, 2014
ExpensedRemaining
Deferred Amounts Amortization Year 2, 2015
Amortization Year 3, 2016
Amortization Year 4, 2017
Amortization Year 5, 2018
Total Amortization
Years 2 through 5
Differences between expected and actual economic experience $133,515 $33,379 $100,136 $33,379 $33,379 $33,379 $0 $100,136
Changes in actuarial assumptions $896,597 $224,149 $672,448 $224,149 $224,149 $224,149 $0 $672,448
Difference between projected and actual investment earnings $2,203,753 $440,751 $1,763,002 $440,751 $440,751 $440,751 $440,751 $1,763,002
Changes in proportion (N/A in 2014) $0 $0 $0 $0 $0 $0 $0Yearly impact on pension expense $183,223 $183,223 $183,223 $183,223 $440,751
Public Employees Retirement Association of Minnesota
Example of Deferred Inflows/Outflows Investment Earnings Amortization Schedule
City of Brooklyn CenterIncrease (Decrease) in Pension Expense Arising from the Recognition of Differences
between Projected and Actual Earnings on Pension Plan Investments
Year Plan
Difference between Projected and Actual Earnings on Investments
Amort-ization Period (Years) 2014 2015 2016 2017 2018 2019
2014 GERF
($2,203,755) 5 ($440,751) ($440,751) ($440,751) ($440,751) ($440,751)2015 GERF $2,500,000 5 - $500,000 $500,000 $500,000 $500,000 $500,00020162017
Net Increase (Decrease) in Pension Expense
($440,751) $59,249
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Public Employees Retirement Association of Minnesota
GASB 71Amends paragraph 137 of GASB 68
Contributions after the measurement date prior to fiscal year end booked to deferred outflows rather than pension expense
At the beginning of the period in which the provisions of Statement 68 are adopted the government should recognize a beginning deferred outflow of resources only for its pension contributions
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Public Employees Retirement Association of Minnesota
Transition Year Journal Entries
City of Brooklyn Center example: employer contributions expensed during initial measurement period are reclassified
6/30/2014 12/31/201412/31/2013
City’s Fiscal Year End Reporting Date
City’s Prior Fiscal Year End
Measurement Period
Beginning NPL
$7,561,819
PERA Contributions
$260,770
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6/30/2013
Measurement Date
Public Employees Retirement Association of Minnesota
Transition Year Journal Entries
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City of Brooklyn Center:
1) Net position $7,561,819
Net pension liability $7,561,819
Prior period adjustment to recognize beginning net pension liability as of July 1, 2014, for change in accounting principle.
2) Deferred outflows of resources $260,770
Net position $260,770
Prior period adjustment to reclassify pension contributions during the measurement period (July 1, 2013 through December 31, 2013), which had been closed to net position for the year ended December 31, 2013, as deferred outflows of resources.
Public Employees Retirement Association of Minnesota
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Year-End Journal Entries1 Net Pension Liability $506,046
Deferred Outflows $772,584
Deferred Inflows $1,763,002
Pension Expense $484,372
To record NPL, Deferred Outflows, Deferred Inflows and Pension Expense as of the measurement date (6/30/2014).
2 Deferred Outflow -
Pension Expense -
Net Pension Liability -
Deferred Inflow -
To record the change in proportionate share from prior measurement date to current measurement date. This journal entry recognizes the change in proportion between measurement periods and applies the difference to NPL.
3 Net Pension Liability $528,666
Deferred Outflow $528,666
To reclassify 7/1/13 through 6/30/14 contributions
Public Employees Retirement Association of Minnesota
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Year-End Journal Entries
4 Pension Expense -
Deferred Outflow -
To amortize the change in proportionate share from prior valuation to current valuation.
5 Pension Expense -
Grant Revenue -
To recognize proportionate share of State of Minnesota contribution (special funding situation).
6 Deferred Outflow of Resources $263,600
Cash (or Pension Expense) $263,600
To recognize contributions made from 7/1/14 through 12/31/14.
Public Employees Retirement Association of Minnesota
23
Year-End Journal Entry T-Accounts (1 of 2)
City of Brooklyn Center
December 31, 2014 Reporting Period
Net Pension Liability Deferred Outflows Deferred Inflows Fringe Benefits Expense
2) $1,763,002 $7,561,819 1 T) 2 T) $260,770 $528,666 3) $1,763,002 2) 1) $263,600 $263,600 7)
3) $528,666 $772,584 2) 2) $772,584 $2,270 5)
5) $2,270 $484,372 2) 7) $263,600
$6,524,837 $766,018 $1,763,002
Pension Expense Cash Net Position
2) $484,372 $263,600 1) 1 T) $7,561,819 $260,770 2 T)
$484,372 $263,600
$7,301,049
Public Employees Retirement Association of Minnesota
24
Year-End Journal Entry T-Accounts (2 of 2)
Transition year journal entries
1 T) Establish beginning NPL
2 T) Recognize deferred outflows for contributions closed to net position in the prior reporting period (7/1/13-12/31/13)
Annual journal entries
1) Recognize contributions from the measurement date to the end of the fiscal year (July 1, 2014, through December 31, 2014)
2) Recognize pension expense, deferred inflows and deferred outflows at the measurement date
3) Reclassify contributions made during the measurement period (July 1, 2013 through June 30,2014)
4) Change in proportionate share ($0 first year)
5) Difference in contributions used as the basis for the proportionate share allocation ($530,947) and contributions
that would be reported in the city's financial statements at the measurement date ($528,666) or $2,270.
This amount also is the city's proportionate share of the adjustments to total contributions as disclosed in the notes
to the GASB 68 schedules ($1,634,774*.001389 = $2,270).
6) Recognize pension expense for this year's amortization of prior year deferred inflows and outflows
of resources (n/a for the transition year)
7) Reclassify contributions after the measurement date (7/1/2014 through 12/31/2014)
Public Employees Retirement Association of Minnesota
Suggested GASB 68 Footnotes
25
Suggested GASB 68 Pension Footnotes for Employers Financial Statements for the Fiscal Year Ended December 31 Summary of Significant Accounting Policies Pensions. For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Note X. Defined Benefit Pension Plans [Include information for the specific plans that apply to your entity] A. Plan Description
The [entity] participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401 (a) of the Internal Revenue Code. 1. General Employees Retirement Fund (GERF)
All full-time and certain part-time employees of the [entity’s name] are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan.
Public Employees Retirement Association of Minnesota
RSI Schedule of Employer’s Proportionate Share of the Net Pension Liability
Ten-year schedule presenting, by plan:Employer’s proportion, both percentage and amount,
of the collective NPL
Employer’s covered-employee payroll as of the measurement date
Employer’s amount of the collective NPL as a percentage of covered-employee payroll
Plan’s fiduciary net position as a percentage of the total pension liability
26
Public Employees Retirement Association of Minnesota
27
Schedule of Proportionate Share of the Net Pension Liability
City of Brooklyn Center’s Proportionate Share of the Net Pension LiabilityPERA General Employees Retirement Fund
Required Supplementary Information (Last Ten Years*)
Fiscal Year Ending
Proportion (Percentage) of the Net Pension Liability (Asset)
Proportionate Share (Amount) of the Net
Pension Liability (Asset) (a)
Covered-Employee Payroll
(b)
Proportionate Share of the Net Pension
Liability (Asset) as a Percentage of its
Covered-Employee Payroll (a/b)
Plan Fiduciary Net Position as a
Percentage of the Total Pension
LiabilityJune 30, 2014 0.1389% $6,524,826 $7,430,645 87.8% 78.7%
* Schedule is to be provided prospectively beginning with the employer's fiscal year ended June 30, 2015, or after.
Public Employees Retirement Association of Minnesota
RSI Schedule of Employer Contributions
Ten year schedule, by plan:Statutorily required employer contributions
Actual contributions paid by employer
Difference between required and paid contributions
Amount of contributions paid in relation to required contributions as a percentage of the employer’s covered-employee payroll as of the reporting date
28
Public Employees Retirement Association of Minnesota
29
Schedule of Contributions
City of Brooklyn Center Schedule of ContributionsPERA General Employees Retirement FundRequired Supplementary Information (Last Ten Years*)
Fiscal Year Ended
Statutorily Required
Contribution (a)
Contributions in Relation to the
Statutorily Required
Contribution (b)
Contribution Deficiency
(Excess) (a-b)
Covered-Employee
Payroll (d)
Contributions as a Percentage of
Covered-Employee Payroll
(b/d)December 31, 2014 $528,666 $528,666 $0 $7,458,169 7.09%December 31, 2015December 31, 2016December 31, 2017December 31, 2018December 31, 2019December 31, 2020December 31, 2021December 31, 2022December 31, 2023
* Option to provide RSI for ten years at transition or to provide RSI prospectively.
Public Employees Retirement Association of Minnesota
Annual TimelineJune 30—Fiscal year end (Measurement Date)
August—Census and asset data sent to actuary
November—Actuarial valuations finalized
December 1—PERA prepares GASB schedules
January—Plan auditor finalizes GASB 68 audit
February 10—PERA publishes GASB schedules and audit report
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Public Employees Retirement Association of Minnesota
SummaryEvery year PERA will provide GASB 68 information
on its website (Financial Reporting Toolkit)Independent Auditor’s Report and Management LetterSchedule of Employer AllocationsSchedule of Pension Amounts by EmployerNotes to the pension allocation schedules
The June 30, 2014, pension allocation amounts were finalized August 24, 2015, for employers with a June 30 fiscal year end
Future GASB 68 schedules and audit opinion will be available in February each year
31
Public Employees Retirement Association of Minnesota
Allocating Pension Amounts to Proprietary/Fiduciary Funds
No allocation requirements in GASB 68
NCGA Statement 1, paragraph 42--long-term liabilities should be reported in Statement of Net Position (fiduciary net position) if:
Amount is material; liability is directly related to the fund; and liability is expected to be paid from the fund
See GASB 68 Implementation Guide Question 122 for cost-sharing plans and Question 36 for Single-Employer/Agent Plans
Will need to address changes in proportionate share within reporting entity
32
Public Employees Retirement Association of Minnesota
FIRE RELIEF ASSOCIATIONS
33
Public Employees Retirement Association of Minnesota
Fire Relief AssociationsOffice of the State Auditor’s June 2014 Pension
Division NewsletterCities that prepare financial statements in accordance
with GAAP need to include the NPL and pension expense of the affiliated relief association If amounts are material If the fire department is a city fire department (not an
independent non-profit firefighting corporation)Alternative to costly actuarial valuation—accept liability
amounts calculated using State Auditor’s annual Schedule Form if difference is not significant
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Public Employees Retirement Association of Minnesota
Single-Employer/Agent PlansIn contrast to cost-sharing plans, single-
employer/agent plans have:
Fewer footnote disclosures
One additional footnote schedule
Schedule of Changes in the Net Pension Liability
One additional RSI schedule
Ten-year Schedule of Changes in the Net Pension Liability
The Ten-year Schedule of Net Pension Liability and Schedule of Changes in Net Pension Liability can be combined.
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Public Employees Retirement Association of Minnesota
Fire Relief AssociationsMost relief associations are overfunded, so NPL will
be a Net Pension Asset.
PERA will provide cities/townships whose fire departments have joined PERA’s Statewide Volunteer Firefighter Retirement Plan with GASB 68 schedules.
The RSI Schedule of Required Contributions is only applicable to fire relief associations that paid statutorily-required contributions.
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Public Employees Retirement Association of Minnesota
American Institute of CPAs® Governmental Audit Quality Center
Cost-Sharing Plans: Employer Responsibilities
• Complete and accurate census data to plan
• Appropriateness of information used to record financial statement amounts
• Whether plan auditor’s report on schedules are adequate and appropriate for employer purposes
• Amounts in schedules specific to employer
• employer amount used in allocation percentage (numerator)
• recalculate allocation percentage of employer• recalculate allocation of pension amounts
based on allocation percentage of employer
Report
Evaluate
Verify & Recalculate
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Public Employees Retirement Association of Minnesota
American Institute of CPAs®
38Governmental Audit Quality Center
Cost-Sharing Plans: Employer Auditor Responsibilities
• Sufficiency and appropriateness of audit evidence
• Whether plan auditor’s report on schedules are adequate and appropriate for auditor purposes (e.g., evidence)
• Review plan auditor’s report and any related modifications
• Evaluate whether plan auditor has necessary competence and independence
• Determine whether named as specified user
• Amounts in schedules specific to employer• Employer amount used in allocation percentage
(numerator)• Recalculate allocation percentage of employer• Recalculate allocation of pension amounts based on
allocation percentage of employer
• Census data submitted to plan
Determine
Evaluate
Verify & Recalculate
Test
Public Employees Retirement Association of Minnesota
More Information
PERA’s website• www.mnpera.org• Employers tab• GASB 68 Public Pension Accounting Standards
Contact Jim Riebe at [email protected]
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