GASB 73/74/75: The Series


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New accounting rules for public postretirement benefit plans in the United States are set to take effect soon. Successful implementation of the new rules will require an understanding of a variety of technical concepts regarding the various newly required calculations. Two years ago, in a multipart PERiScope series, we explored these technical topics in detail as they related to Governmental Accounting Standards Board (GASB) Statements 67 and 68. We now take a similar approach with GASB Statements 73, 74, and 75. Milliman has established a task force for GASB 73/74/75 that will publish a detailed series of educational articles regarding various key implementation and technical issues surrounding these new statements. This series will result in numerous articles in the upcoming months.

Overview of GASB Statements 73, 74, and 75
Successful implementation of new accounting rules for public postretirement benefit pension plans will require an understanding of a variety of technical concepts regarding various newly required calculations. We take a look at Government Accounting Standards Board (GASB) Statements 73, 74, and 75.


GASB 74/75: Calculation specifics on individual entry age normal
New regulations eliminate the option for actuaries to choose among cost methods used to calculate the liabilities of retirement plans for funding purposes and instead specify a single entry age approach, detailed in this article.


GASB 73/74/75: Timing considerations for compliance with new financial reporting rules
Changes in GASB Statements Nos. 74 and 75 are designed to standardize the way other postemployment benefits (OPEB) expense is calculated and displayed in order to enhance disclosure and facilitate decision-making.


GASB 74/75: Depletion date projections
This article focuses on the determination of a plan’s depletion date, the projected point in the future (if any) when plan assets are no longer sufficient to satisfy benefit obligations.


GASB 74/75: Long-term expected investment returns and the money-weighed rate of return
This article discusses the development of the long-term expected rate of return assumption and the selection of the municipal bond rate, both of which are used to determine the single equivalent discount rate. The article also covers the technical details of calculating the money-weighted rate of return and provides a summary of the discount rate and other asset-related disclosures required by GASB 74 and 75.


GASB 73: Implementation and overview
GASB Statement 73 is for accounting and financial reporting for pensions not within the scope of GASB Statement 68 and applies for employer fiscal years beginning after June 15, 2016.


GASB 74/75: Impact on small government employers
This article reviews the Alternative Measurement Method, which is used by small government employers in lieu of an actuarial valuation.


GASB 75: Proportionate Share Allocations for Cost-sharing Employers
This article discusses the allocation of financial reporting liabilities and expenses for cost-sharing multiple-employer other postemployment benefit (OPEB) plans.


Milliman’s GASB 73/74/75 Task Force is releasing a miniseries on technical and implementation issues surrounding GASB 73, 74, and 75. Each article will be released through PERiScope. Look for the following articles in coming months:

  • Balance sheet items and projections from valuation date to measurement date
  • Calculation of OPEB expense
  • Revised ASOP 6 and Community Rated Plans

Next steps