Agenda Item 3E
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MAZE 35 of 46
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Agenda · GASB 68 Overview · Financial Statement Changes · What does this look like for AC Transit? · Questions 36 of 46 ©20 15 Maze & Associates
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GASB 68 Overview · GASB 68 divorces accounting for pensions from a contribution basis to valuing the NPL as it is earned through service provided. · Prior to GASB 68, pension expense usually equaled the ARC. · With the implementation of GASB 68, the ARC is one component of pension expense. · Payments toward the ARC are no longer considered "pension expense;' it is a reduction of the NPL. 39 of 46 ©20 15 Maze & Associates
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GASB 68 Overview · Retirement Plan implemented GASB 67 in fiscal year ending
12/31/14. · Disclosure only
· District implemented GASB 68 in the fiscal year ending June 30,
2015 · District must now recognize a Net Pension Liability (NPL) · Difference between the assets held in the Retirement Plan and the Total Pension Liability as determined by the actuary.
· More extensive disclosures and required supplementary information. 40 of 46
©20 15 Maze & Associates
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Financial Statement Changes Statement of Fund Net Position (Balance Sheet) · Net Pension Liability · Deferred Outflow of Resources · Difference between expected and actual experiences · Changes in actuarial assumptions · Differences between projected and actual return on investments
Statement of Revenues, Expenses, and Changes in Net Position Oncome Statement) · Pension Expense · · · ·
Service Cost Interest on total pension liability Benefit changes to the plan during the fiscal year 41 of 46 Amortization ©2015 Maze & Associates
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BEFORE GASB 25/27 Actuarially Accrued Liability
AFTER GASB 67/68
$810,417
Total Pension Liability
minus Actuarial Value of the Assets
495,855 *
minus Fiduciary Net Position (FMV assets)
equals Unfunded Actuarial Accured Liability
$314,562
-This liability was not recorded -Disclosure only
$810,417
563,108 equals
Net Pension Liability
$247,309
This is recorded only by the employer
* Estimate based on latest Non GASB 68 report. 42 of 46
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Balance at 12/31/2013 Changes for the year: Service cost Interest Changes of benefits Changes of assumptions Difference between expected and actual experience Contribution - employer Contribution - member Net investment income Benefit payments Administrative expense Net changes Balance at 12/31/2014 43 of 46
Increase (Decrease) Total Pension Plan Fiduciary Liability Net Position (a) (b) $785,289 $547,493 16,698 55,840
(47,410) 25,128 $810,417
Net Pension Liability (a) - (b) $237,796 16,698 55,840
40,384
(40,384)
23,507 (47,410) (866) 15,615 $563,108
(23,507) 866 9,513 $247,309 9
1% Decrease 6.25%
Discount Rate 7.25%
1% Increase 8.25%
Total Pension Liability Plan Fiduciary Net Position
891,970 563,107
810,416 563,107
740,080 563,107
Net Pension Liability
328,863
247,309
176,973
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Operating Expenses Service cost Administrative expenses Total
Change in Net Pension Liability Change in Deferred Outflows Employer Contributions Pension Expense
9,513 (12,724) 40,384 37,173 28.75%
Interest cost Expected return on assets
55,840 (39,412) 16,428
Changes Investment gains and losses Total Pension Expense
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17,564
Financing Expenses
Total
Pension Expense as % of Payroll
16,697 867
3,181 37,173
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