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Governmental Accounting Standards Board Statement Number 5In November 1986, the Governmental Accounting Standards Board issued Governmental Accounting Standards Board Statement Number 5: Disclosure of Pension Information by Public Employee Retirement Systems and State and Local Governmental Employers. Summary This Statement established standards for disclosure of pension information by public employee retirement systems (PERS) and state and local governmental employers in notes to financial statements and in required supplementary information. It standardized pension disclosure guidance by superseding the pension disclosure requirements of paragraph 9 of GASB Statement No. 1, Authoritative Status of NCGA Pronouncements and AICPA Industry Audit Guide. The disclosures required by this Statement were intended to provide information needed to assess (a) funding status of a PERS on a going-concern basis, (b) progress made in accumulating sufficient assets to pay benefits when due, and (c) whether employers are making actuarially determined contributions. Disclosures are required both in financial reports issued by PERS and in financial reports issued by employers, including those that do not fund their pension obligations. In addition to disclosures about plan provisions, actuarially determined contribution requirements, contributions actually made, and significant actuarial assumptions, this Statement required the computation and disclosure of a standardized measure of the pension obligation. That measure, which may differ from that produced by the actuarial funding method used to determine contribution requirements, is the actuarial present value (APV) of credited projected benefits prorated on service: it considers both salary progression and step-rate benefits. It was referred to in this Statement as the "pension benefit obligation." An actuarial valuation to calculate this measure should be made at least once every two years, with an update in years when a full valuation is not performed. Ten-year trend information should also be presented as required supplementary information. This information includes comparisons of (a) net assets available for benefits to the pension benefit obligation, (b) unfunded pension benefit obligation to annual covered payroll, and (c) revenues by source to expenses by type. Employers may make reference to the availability of 10-year trend information in publicly available PERS reports or in their own comprehensive annual financial reports (CAFR) rather than present the information with their general purpose financial statements (GPFS). For purposes of this Statement, PERS are categorized as single-employer, agent multiple-employer, and cost-sharing multiple-employer. Employers are required to disclose only summary information about their participation in cost-sharing multiple-employer PERS. Small PERS and small employers (as defined in the Statement) may disclose the actuarial accrued liability developed from certain specified actuarial funding methods, instead of the standardized measure of the pension obligation required of larger entities. These smaller entities are also exempted from the requirement for actuarial updates. Guidance was also provided on disclosure of information on defined contribution pension plans. Status Effective Date Financial reports issued for fiscal years beginning after December 15, 1986. Amends earlier standards This statement amended GASB 4, 11, NCGAS 1 concerning required supplementary information (principle 12 and 128, 129, 137, 139, 144, and 167), superseded NCGAS 6, 5-21 ,amended NCGAS 7, 7, 8, 15, and 25, amended NCGAI 6, 4 and 5, and amended AICPA SOP 80-2, 4. Amended by later statements This statement has been extensively modified by GASB 14, GASB 24, GASB 25, and GASB 27. Specifically, this statement's paragraphs 1-13, 17, 26-29, 34-36, 39-45, 47, and 115 and fns5-7 and 10 were superseded by GASB 27, paragraphs 1-25, 30-34 (except for fns5-7 and 10), 37, 38, 40, 44-46, and 115 and fn15 were superseded by GASB 25, paragraph 35 and fn11 were amended by GASB 24, 12, paragraph 36 and fn12 were amended by GASB 25, paragraph 39 was amended by GASB 24, 12, paragraph 40 was amended by GASB 14, 11 and 63, and paragraphs 41 and 47 were amended by GASB 24, 12. Discussion
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