By Neil Bomberg
As part of its ongoing efforts to help elected officials better understand their obligations under state and local public pension laws, the National Association of State Retirement Administrators or NASRA again produced a very timely and handy one-pager designed to help elected officials stay on top of their pension contributions, and to accurately report their net or long term liabilities, and accrued expenditures. The one pager - entitled Understanding New Public Pension Funding Guidelines and Calculations -- provides a straightforward overview of the different reporting requirements, and what they mean for your bottom line: your city or town budget.
The one pager identifies three different pension reporting requirements that every elected official needs to be aware of and how current laws and regulations apply to those categories. Dividing reporting between "Books, Bonds, and Budgets," the one-pager describes the purpose, primary audience, source of calculation, methodology and what's changing for each of these categories so that you can better understand your reporting requirements.
The most important lesson one can glean from this very useful document is that how you record your pensions on your books will be very different than how you report them for bonds, and what you do with them when you develop your budget. Whereas the latter will focus on what contributions have to be made in the current budget year to ensure that you meet your annual required contributions, the former will provide a standardized way of reporting on pensions liabilities solely for accounting purposes, and the second will offer bond raters a measure of the fiscal stress your city or town is experiencing.
To view Understanding New Public Pension Funding Guidelines and Calculations, click here.