Industry News

On May 3, 2019, the National Conference on Public Employee Retirement Systems (NCPERS) released a report, The Case for New Pension Accounting Standards. Written by Tom Sgouros, Research Associate in the Computer Science Department at Brown University, the report is part of a research project sponsored by NCPERS. It presents an analysis of the existing Governmental Accounting Standards Board (GASB) accounting standards for public pension funds, and suggests possible alternatives for changing the accounting rules which are intended to help keep pension plans sustainable. Some of the potential reforms of the accounting rules presented include:

• Reform of costing to include a standard cost along with the normal cost;
• Use of depletion date calculations rather than a funding ratio for planning purposes;
• Risk weighting of pension fund assets to indicate the level of risk in a portfolio; and
• Creation of standards for valuation of the economy, which ultimately secures a public pension system.

The report is available here.