GASB 68: How Will State Unfunded Pension Liabilities Affect Big Cities?


The brief’s key findings are:

  • New accounting provisions – GASB 68 – require localities in state cost-sharing plans to report their share of the plan’s unfunded liability on their books.
  • This change severely increases the unfunded liabilities of the affected cities, though the states’ unfunded liabilities drop by a corresponding amount.
  • The impact on our full sample of 173 cities is much more modest, because the 92 affected cities are small.
  • The big question is whether cities with a portion of the state plan’s burden on their books have a greater interest in reducing the unfunded liabilities.