FINANCIAL REPORTING

GASB 68 and Your Financial Reporting

There are three ways GASB 68 affects your financial statements.

  1. Net pension liability appears on your balance sheet. It may be much larger in comparison with other liability line items. In addition, it is calculated differently from your Unfunded Actuarial Accrued Liability, which is computed for funding purposes.
  2. You report deferred inflows or outflows. These are amounts that are not entirely recognized in the year they occur. Instead, they are recognized over multiple years.
  3. The pension expense shown on your income statement is calculated differently and it could be more volatile year to year.

WHAT YOU WILL NEED

Your GASB 68 Report provides you with the information you need to complete your audited financial statement. This report is available each May when you sign into your employer account on this website.

You can also refer to our GASB 68 Playbook for help with applying your GASB 68 Report to your financials.

If you have multiple financial statements, you may want to allocate your net pension liability, pension expense and deferred inflows/outflows to subsets of your organization, such as different funds, divisions or departments for reporting purposes. If you need to do this, please contact your Employer Services Representative at 800-651-3848.

If you are a new employer

If you were not participating in TCDRS as of Dec. 31 of last year, you will only need to show a limited amount of plan information on your financials. TCDRS will provide you with the plan description you’ll need for your note disclosures. In addition, you’ll need to account for contributions made after the measurement date (Dec. 31) but before the end of your fiscal year as a deferred outflow of resources. These contributions include employer contributions, but not member deposits or Group Term Life premiums. Please contact your Employer Services Representative and they can help you determine this amount. 


Definitions

Total Pension Liabilities: The portion of the actuarial present value of projected benefit payments that is attributable to past periods of employee service.

Fiduciary Net Position: These are resources accumulated (plan assets) and held in trust to pay for the benefits represented by the total pension liability. 

Net Pension Liability: The difference between the value of total pension liabilities and fiduciary net position.



Deferred Inflows/Outflows: Deferred inflows/outflows refer to items that are not yet recognized in the net pension liability. Three types of items are covered in this category:

  • Difference between projected and actual investment results
  • Actuarial gains and losses
  • Employer contributions made after the measurement date (Dec. 31) through your fiscal year end

Pension Expense: In the past, your pension expense was based on your employer contributions. Because of the separation between your plan funding and accounting, that’s no longer the case. For your accounting, pension expense is the change in net pension liability from year to year, adjusted for the change in deferred inflows/outflows.

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