CalPERS NON-POOLED PLANS

For the fiscal year ending 6/30/2015, California public agencies will need to comply with the new Governmental Accounting Standards Board (GASB) statement 68 pension accounting rules. Most agencies will want to have CalPERS complete their GASB 68 pension reporting because:

• The AICPA GASB 68 accounting whitepaper for “agent” multiple employer plans (like CalPERS non-pooled plans) recommends that employers obtain and review the individual census data used in the 6/30/2013 CalPERS funding valuation, which serves as the basis for estimating fiscal 2015 GASB 68 liabilities.  (Liabilities are “rolled forward” to 6/30/2014 and reported, along with actual 6/30/2014 assets, as though they were as of 6/30/2015.)
• CalPERS controls the census data and, until 6/30/2014 assets or funding reports are released, the asset information.
• CalPERS will charge the same fee to release the census data and assets as to prepare the GASB 68 accounting report.

California public agencies that need an alternative for timing, cost or other reasons can use our “Plan B” GASB 68 reporting option. To do that, the agency and its auditor would need to be comfortable relying on:

• CalPERS’s external auditor’s review of its census data processes,
• A comparison of the agency’s personnel records with the Summary of Valuation Data in the 6/30/2013 CalPERS funding report, and
• Estimated assets, if 6/30/2014 assets have not been released.  Our estimates are based on CalPERS’s published FY14 return, the CalPERS asset gain/loss method, and the agency’s actual FY14 contributions.  Each test of this method has produced estimated assets within 1% of actual.  We will run a comparison of actual vs. estimated 6/30/2013 assets for any CalPERS non-pooled plan upon request.

 

This chart shows a brief comparison of CalPERS and Van Iwaarden methods.

	CalPERS	Van Iwaarden
Fees	$2,500 per non-pooled plan.	Substantially less.
Timing	Beginning in May 2015.	Three weeks from receipt of asset information (if any; see explanation below).
Combination of Results	Not expected to be available.	Combined results for multiple plans (e.g. miscellaneous, police and fire) included in fee.
Consulting		Up to one hour of consulting included in fee.
Measurement Date	June 30, 2014	June 30, 2014
Assets	Actual June 30, 2014 audited assets.	Actual June 30, 2014 audited assets, if available from CalPERS. Estimate if not, using the PERF A published return, the CalPERS asset gain/loss method and the agency’s actual FY14 contributions. Each test of this method has produced estimated 6/30/2013 assets within 1% of actual.
Valuation Date and Method	Liabilities “rolled forward” from the 6/30/13 funding valuation to 6/30/14.	Liabilities “rolled forward” from the 6/30/13 funding valuation to 6/30/14, same as CalPERS.
Census Data	As of 6/30/13.   Individual census data to comply with AICPA employer recommendation is available only from CalPERS.	Need to rely on CalPERS auditor’s review of its data processes, combined with a comparison of the agency’s personnel records with the Summary of Valuation Data in the 6/30/2013 CalPERS funding report.
Discount Rate	7½% with no “crossover” from trust to muni bond rate, based on the CalPERS crossover testing report.	7½%, same as CalPERS. Liabilities at 1% discount rate increase or decrease estimated from 6/30/13 CalPERS valuation report.

GASB 67/68 & Pensions –> What is GASB 67/68? —  FAQ’s —Discount Rates, Etc.  –CalPERS Non-Pooled Plans— Fire Relief Associations —  Resources