Return to GASB Statements 43 and 45 Facts

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Currently, public OPEB sponsors record no ongoing liability for these benefits on their financial statements.
 

Under the new GASB standards, a liability is created that reflects benefits already “earned” by active employees. An amortized portion of the liability, plus an amount for benefits considered “earned” during the year, is treated as an expense for the year. Unless there is pre-funding, the liability to record on the financial statements will basically be a running total of the excess of this expense over benefits actually paid to retirees, and will grow rapidly.