The Governmental Accounting Standards Board (GASB) in 2012 released new accounting standards for public pension plans and participating employers. These standards, GASB Statements No. 67 and 68, have substantially revised the accounting requirements previously mandated under GASB Statements No. 25 and 27. Required implementation is imminent, with GASB 67 effective for plan fiscal years beginning after June 15, 2013, and GASB 68 effective for employer fiscal years beginning after June 15, 2014.
This article discusses the development of the long-term expected rate of return assumption and the selection of the municipal bond rate (both of which are used to determine the single equivalent discount rate), covers the technical details of calculating the money-weighted rate of return, and summarizes of the discount rate and other asset-related disclosures required by GASB 67/68.