GASB 68 Reporting and Actuarial Valuation Comparison
GASB 68 Reporting as Compared to 2015 Actuarial
Valuation
2015 Year One
First Year for implementing GASB 68 on our financial
statements.
First Year of reporting the Bay County Retirement
System (BCERS) as its stand alone financial
statements.
First Year of reporting Bay-Arenac Behavioral Health
(BABH) as a separate defined employer entity.
GASB 68 Reporting
Implementation of GASB 68 was effective for
December 31, 2015 year end Financial Statements that
were due June 30, 2016.
GASB 68 is to provide information about the effects of
pension-related transactions for Bay County
Employee’s retirement system. This information will
provide users the information about the employers
and non-employer pension obligations and the
resources available to satisfy those obligations.
GASB 68 continued
If the assets of a multiple-employer defined benefit
pension plan are pooled for investment purposes but
separate accounts are maintained for each individual
employer so that each employer’s share of the pooled
assets is legally available to pay the benefits of only its
employees, the pension plan should be classified as an
Agent Multiple-Employer Defined Benefit
Pension Plan.
Due Dates of Required Reports
BABH Financial Statements are due March 30
th
of each
year.
Bay County Financial Statements are due June 30
th
of
each year.
For Fiscal Year 2015 reporting – GASB 68 actuarial
calculations were not completed until September 2016.
The valuation method was not determined until this
date.
Valuation Methods Proposed
It was necessary to make a determination of the basis
of “True” Market Value for BABH and the other County
groups going forward, given the March 2015, legal
opinion by Corporation Counsel, qualifying Bay
County Employee’s Retirement System (BCERS) as an
“Agent Multiple Employer” defined benefit plan.
Market Value is now needed for BABH but this value
has never been tracked by individual group, and that
actuarial standards require a consistent relationship
between Market Value and Actuarial Value
Valuation Methods continued..
Listed below are two types of market valuations:
Implied Market Value
– the individually developed
valuation of assets multiplied by total MVA/Valuation
Assets.
MVA on Reserves
– adjusting for actual contributions
and benefit payments for each individual group, and
allocating expenses and investment income as if each
group gets the same investment return.
Approach Method Determination
It was determined after consulting with GRS,
Rehmann and myself that the Implied Market Value
was the preferred method for future valuations.
I believe this method will be a more consistent
approach when determining the market value of
assets, and better reflect the value of the separate
pension plans.
BABH Reporting Detail
GASB 68 reporting as compared to the 2015 actuarial valuation focused on the implementation of GASB 68 for financial statements, including the reporting of entities like the Bay County Employee Retirement System and Bay-Arenac Behavioral Health. The process involved providing information on pension-related transactions, obligations, and resources available. The discussion also covered the classification of pension plans and due dates of required reports for financial statements. Moreover, it touched on the valuation methods proposed and continued, emphasizing the need for determining true market value and the relationship between market value and actuarial value.
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Presentation Transcript
2015 Year One First Year for implementing GASB 68 on our financial statements. First Year of reporting the Bay County Retirement System (BCERS) as its stand alone financial statements. First Year of reporting Bay-Arenac Behavioral Health (BABH) as a separate defined employer entity.
GASB 68 Reporting Implementation of GASB 68 was effective for December 31, 2015 year end Financial Statements that were due June 30, 2016. GASB 68 is to provide information about the effects of pension-related transactions for Bay County Employee s retirement system. This information will provide users the information about the employers and non-employer pension obligations and the resources available to satisfy those obligations.
GASB 68 continued If the assets of a multiple-employer defined benefit pension plan are pooled for investment purposes but separate accounts are maintained for each individual employer so that each employer s share of the pooled assets is legally available to pay the benefits of only its employees, the pension plan should be classified as an Agent Multiple-Employer Defined Benefit Pension Plan.
Due Dates of Required Reports BABH Financial Statements are due March 30thof each year. Bay County Financial Statements are due June 30thof each year. For Fiscal Year 2015 reporting GASB 68 actuarial calculations were not completed until September 2016. The valuation method was not determined until this date.
Valuation Methods Proposed It was necessary to make a determination of the basis of True Market Value for BABH and the other County groups going forward, given the March 2015, legal opinion by Corporation Counsel, qualifying Bay County Employee s Retirement System (BCERS) as an Agent Multiple Employer defined benefit plan. Market Value is now needed for BABH but this value has never been tracked by individual group, and that actuarial standards require a consistent relationship between Market Value and Actuarial Value
Valuation Methods continued.. Listed below are two types of market valuations: Implied Market Value the individually developed valuation of assets multiplied by total MVA/Valuation Assets. MVA on Reserves adjusting for actual contributions and benefit payments for each individual group, and allocating expenses and investment income as if each group gets the same investment return.
Approach Method Determination It was determined after consulting with GRS, Rehmann and myself that the Implied Market Value was the preferred method for future valuations. I believe this method will be a more consistent approach when determining the market value of assets, and better reflect the value of the separate pension plans.
BABH Reporting Detail Fiscal Year 2014 Fiscal Year 2015 Adj. FY 2015 (Reported Mar. 30, 2015) (Reported Mar. 30, 2016) Calc on Implied MV Actual Accrued Liability for Benefits $45,971,922 $46,920,346 $48,624,039 Actuarial Value of Assets $39,863,628 A $55,247,713 B $46,894,673 C ( Unfunded ) Liability ($6,108,294) $8,327,367 ($1,729,366) Unfunded Ratio 86.70% 117.75% 96.40% Increase of Asset Valuation from FY 2014 to 2015 $15,384,085 $7,031,045 (B -A) (C-A)
