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GASB 43/45 (OPEB)

GASB (Governmental Accounting Standards Board) is an organization that sets accounting standards for governmental entities. GASB 43/45 deal with the manner in which Governmental entities should account for and financially report the long term liabilities associated with OPEB, excluding pensions, offered to retirees.

OPEB stands for retirement obligations employers have for Other Post-Employment Benefits and includes retiree health care, dental care, and any other post employment health benefit (such as life insurance, vision, hearing, prescriptions, long-term disability, etc.) OPEB does not include pension or deferred compensation plans. Funding for OBEB obligations comes from the employer.

GASB 43 deals specifically with plans that provide OPEBs through trusts, while GASB 45 focuses on the reporting and disclosure requirements for employers.

The cost of employee benefit plans continues to increase every year. This unknown and ever increasing cost factor made these governmental "promise of a benefit" OPEB plans susceptible to financial collapse. It is for this reason that all governmental entities are now required by GASB to actuarially account for their total long-term OPEB costs over the active service life of the current employees, rather than reporting the current year OPEB costs paid for current retirees.

GASB 43/45 were created so that organizations would have guidelines to follow in order to recognize OBEP expenses when the benefits are earned (accrual based accounting) rather than when they are paid out (cash basis). The GreatGASB Group was created to help organizations make sure they are in full compliance with both.

GreatGASB Group TPA Services

To read more about the individual services we offer, click the links below:

Actuarial Services
Consulting & Plan Design
Legal
Defined Benefits/Defined Contribution
Funding
Our System
OPEB

Compliance requires reporting the true current and future OPEB liability correctly on the annual financial statements. GASB compliance does not require OPEB pre funding. That said, today's most commonly voiced employer concern surrounds the newly stated liability on the financials and how it may cause bond rating problems. By developing a "resolution strategy action plan" the employer can mitigate the impact of the OPEB liability with the assistance of GGG's consulting services.

Our primary GGG OPEB liability solution identifies the liability and then works with the client to design the solution that will most effectively achieve their goals and the funding of the OPEB liability. The GGG system flexibility provides an opportunity to creatively design client specific solutions.

Actuarial Services:
GGG has contracted with a national firm that specializes in OPEB actuarial work with preferred pricing for our customers. Our actuary can offer limited oversight or comprehensive audits and evaluations. If desired GGG is able to work with other Actuarial Firms.

Consulting and Plan Design:
GGG works closely with the active and retiree benefit plan offerings to design plan options for greater liability reduction. Many times the greatest cost reduction comes with proper management of the underlying active employee health plan design and cost savings strategy. Even with union negotiated plans, GGG can provide options that work.

Legal:
GGG VEBA and 115 documents ready for use by any plan.

Defined Benefit/Defined Contribution:
Frequently employer plan designs end up with a combination of Defined Contribution/ Defined Benefit options as well as new hire rules designed to mitigate future OPEB costs. GGG manages all combinations of benefit plans under a single administrative model.

The current Defined Benefit, OPEB liability, is a "promise of a benefit at retirement." The Defined Benefit Plan remains a GASB liability. An alternative option would be a Defined Contribution plan that is a "promise of a sum of money that is relative in value to the benefits promised." The Defined Contribution Plan would no longer be a GASB liability. The defined contribution Health Reimbursement Accounts are used at retirement for eligible expenses - tax-free. GGG works to design, educate, administrate and enroll the "solution."A final plan design solution could be a combination of new hire rules, defined benefit (GASB) - with or without pre funding and defined contribution (non GASB).

Funding:
GGG is an independent TPA that is paid through administrative fees only. We are not selling funds or investments for the Plans. Our system can work with any bank or fund manager and can link ‘real time” with the Plan’s vendors for audit of payments and withdrawals.

Our System:
GGG's proprietary web based system offers full funding and retirement investment plan record keeping during the accumulation period. In additon, the GGG system integrates the HRA claims and bill payment processing for retirees once they are eligible to spend down these accounts. Participants and employers have access to on-demand reports and information 24/7 for any data we have collected.

OPEB:
OPEB stands for retirement obligations employers have for Other Post-Employment Benefits and includes retiree health care, dental care, and any other post employment health benefit (such as life insurance, vision, hearing, prescriptions, long-term disability, etc.) OPEB does not include pension or deferred compensation plans. Funding for OBEB obligations comes from the employer.