How Would GASB Proposals Affect State and Local Pension Reporting?

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.