FY2015 GASB 68 information: FINAL report and FAQs
Below are links to the updated cover memo and FINAL FY2015 GASB 68 report and pension allocation schedules for the Massachusetts Teachers' Retirement System (MTRS), as required under Governmental Accounting Standards Board (GASB) Statement No. 68. Please note that the final report, dated September 25, 2015, includes attestations from KPMG, the Commonwealth's independent auditor, and minor text edits; the numbers, amounts and internal references to schedules and page numbers did not change from the draft report dated September 21, 2015.
If you have any questions, please contact Michael Rodino of the State Comptroller's office (firstname.lastname@example.org), or Sean Neilon, Assistant Executive Director of the MTRS (email@example.com).
We have worked with the State Comptroller's office on the questions and responses below, and reiterate that entities should consult with their auditors as to how the standard should be applied to their own financial statements.
Question 1: The GASB 68 report is as of June 30, 2014 and my district is finalizing our FY15 financial reports. Am I to use the June 30, 2014 information in my FY15 report?
Response 1: Due to the time required to implement GASB Statement No. 68, GASB has allowed financial statement preparers to select a measurement date that is no earlier than "the end of its prior fiscal year." The Commonwealth selected June 30, 2014 as the measurement date. All participants in the MTRS will report their collective share of the pension expense as of the measurement date in the June 30, 2015 financial statements. Please refer to question 123 of the GASB 68 implementation guide:
123. Q—If a cost-sharing employer's fiscal year-end is the same as the fiscal year-end of the pension plan through which it provides benefits, can the employer report its proportionate share of the collective net pension liability as of a measurement date that is one year earlier than the "as of" date of the (collective) net pension liability reported by the plan at the same fiscal year-end?
A—Yes. To avoid a circumstance in which employer financial reports potentially would be delayed awaiting information that also is included in the pension plan's financial report, Statement 68 permits the measurement date of the collective net pension liability used by a cost-sharing employer to determine its reported pension liability to be as of a date no earlier than the end of its prior fiscal year, provided that the actuarial valuation used to determine the collective net pension liability meets the timing requirements of paragraph 60 of Statement 68 and that the measure meets the requirement of paragraph 61 of Statement 68 that the plan and the employers use the same assumptions when measuring similar or related information. (See Questions 152−154.) Cost sharing pension plans are required by Statement 67 to report information about the (collective) net pension liability as of the plan's fiscal year-end. Therefore, for example, in financial statements as of June 30, 20X5, a cost-sharing pension plan is required to report a (collective) net pension liability measured as of June 30, 20X5, whereas a cost-sharing employer that provides benefits through the plan can report a proportionate share of the collective net pension liability with a measurement date of June 30, 20X4, if the requirements of paragraphs 60 and 61 of Statement 68 are met.
The plan itself, MTRS, must report in the Commonwealth's CAFR a liability in as of June 30, 2015 under the requirements of GASB Statement No. 67.
Question 2: We noted that the draft report is dated as of and for the year ended June 30, 2014. Can you please confirm that the intention of MTRS is to not adopt GASB 68 retrospectively and that the June 30, 2014 figures presented in the draft report will be the measurement date for audits as of and for the year ended June 30, 2015?
Response 2: June 30, 2014 has been selected as the measurement date as allowed by GASB in the year of implementation.
Question 3: We would like to confirm the amounts that the Schools should be including as in-kind revenues and expenses in their financial statements. Our understanding from GASB 68 is that, under the special funding situation the employer (the School) should recognize their proportionate share of the collective pension expense. After reading the draft report, we are not certain whether the Schools should be recording the amount in the 'Supplemental Schedule of Special Funding Amounts by Employer' (Employer Pension Expense and Revenue for Commonwealth Support column) or their amount in the 'Supplemental Schedule of Employer Allocations of Special Funding Amounts' (Commonwealth Pension Support Provided column), or the combined amount from both of these supplemental schedules. Can you please confirm whether the Schools should record the combined total of the figures in both of these supplemental schedules or the amount from one of them?
Response 3: The amounts that the entities will record in their financial statements are on the Supplemental Schedule of Special Funding Amounts by Employer in the column titled "Employer Pension Expense and Revenue for Commonwealth Support." Also, the entities will have to make footnote disclosures of the amounts reported on the Supplemental Schedule of Special Funding Amounts by Employer in the "Commonwealth's Proportionate Share of the Net Pension Liability Associated with the District" column. For further information we refer you to question number 224 of the GASB 68 Implementation Guide related to special funding situations.
Question 4: Why are this year’s on behalf payments lower than last year?
Response 4: In previous years, the on behalf payments were reported under GASB 24 and those payments were the "pay as you go" numbers for the pension portion of the retiree benefits paid to your district's retired educators in the fiscal year. Last year, the total GASB 24 payments were $2,020,477,093. This year, under the GASB 68 standard, the on behalf payments are allocated as a percentage of the Commonwealth's 2014 Pension Expense for MTRS (approximately $1,104,396,000). District allocations are based on the ratio of each employer's covered payroll to the total covered payroll.
Again, we strongly urge your auditors to review the standard to determine the correct accounting treatment.
Now available for employers in MyTRS--
Retiree Insurance functions!
As of February 6, 2015, local insurance coordinators may now process changes to MTRS retirees' insurance coverage and access four different insurance-related reports directly in MyTRS.
What this means for district insurance coordinators
Now, you CAN:
- View the details of your retirees' and survivors' coverage
- Set up, change and cancel individuals’ coverage—in real-time
- Verify that a retroactive coverage change triggered a "rebill" either to bill or refund the individual when our warrant runs
- View the insurance types and rates listed in our system
- Download four different insurance-related reports (these reports are updated monthly, one week after the monthly warrant close date):
- Insurance deduction report--in the existing format and by provider
- Insurance premium list
NOTE: Districts that currently participate in the GIC's Retired Municipal Teacher (RMT) program may only download their GASB45 reports, which will not include their retirees' insurance information. GIC-RMT districts do not have access to retiree insurance functions as these processes are handled for them by the GIC.
- Enter global rate changes. Please continue to submit global rate changes to us via our Group Rate Premium Change Form , which is also available on our Reporting retiree insurance changes page. Because of the nuances in processing global rate changes in MyTRS, we are currently restricting access to this function to MTRS staff. This may change in the future, but for now, this function will remain in-house.
- already have access to MyTRS, please review the training materials, click on the links and begin using the new functions today!
- do not have access to MyTRS and would like to know who in your district is in charge of providing access, please e-mail us at firstname.lastname@example.org with the subject "SA Request" and we will provide you with the name of your district's Security Administrator as appointed by your superintendent.
- READ ME FIRST: What to know BEFORE making changes to retiree coverage (3pp)
- Processing retiree insurance deductions (13pp)
- Checking retiree insurance deduction history (3pp)
- Reviewing retiree deduction rates (2pp)
- Downloading retiree insurance reports (5pp)
I recently submitted a change request to the MTRS and it has not yet been processed. Will the MTRS process it, or should I?
We will continue to process retiree insurance change forms sent to our insurance updates e-mail address as we work with insurance coordinators to transition everyone to the self-service functions. However, we expect that there will be delays in processing requests submitted to us via e-mail as our Employer Services staff will also be supporting employers as they learn how to use the new functions. We encourage employer representatives who do not yet have access to MyTRS to contact their district's MyTRS Security Administrator to get access so that they may avoid unnecessary processing delays.
If you have any outstanding requests, we will process them as usual, in the order in which they were received. However, if you would like to process any of your outstanding requests, please do! You do not need to tell us that you are processing them; if, when we attempt to process your requests, we see that you have already changed the records, we will then verify your changes against your submitted requests, and confirm whether what you did online was correct, or, if not, what issues we identified.
What are the deadlines for submitting changes each month?
If you submit your changes:
- Directly in MyTRS: The deadline is anytime before our monthly warrant processing date--generally, the 15th of each month (e.g., changes made in MyTRS before our warrant processing date in April, will be reflected in the retiree's payment for April, which the retiree will receive at the end of April). For monthly deadlines and other updates, please see the message area on the employer self-service homepage in MyTRS.
- On forms submitted to us via e-mail: The deadline is the first of the month before the month that the changes are to be reflected (e.g., changes to be reflected in the retiree's payment for April must be submitted to us by March 1). As noted above, however, we expect that there will be delays in processing changes submitted via e-mail.
Brand new vs. existing retirees and survivors: Is the process for adding coverage different?
Yes--before you can add coverage for brand new retirees and survivors, the MTRS must first "enable" their insurance records in MyTRS (a quick and easy step for us). Accordingly, when you want to add coverage for a new retiree or newly qualified survivor, please send an e-mail to email@example.com with the subject "Enable new retiree/survivor." In the body of the e-mail, indicate the individual's name and any other details you want to include, and we will process your request as quickly as possible. (Note: We are working to eliminate this extra step in the future by automatically enabling future retirees' insurance records after we have received their retirement applications.)
Who do I contact for support?
Please contact your district's assigned Employer Services Representative.