How Would GASB Proposals Affect State and Local Pension Reporting?

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The brief’s key findings are:

  • GASB proposes two major changes for reporting purposes.
  • Assets would be valued at market rather than smoothed.
  • Liabilities would be discounted by a blended rate using:
    • the long-run return for liabilities covered by projected assets; and
    • the high-grade municipal bond rate for liabilities covered by other resources.
  • These changes would reduce reported funded ratios for our sample of large plans from 76 percent to 57 percent in 2010.

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