economyLocal Government

GASB 43/45 Decision Tree

September 2007

Question Yes No
1. Are assets allocated to individual participant accounts while the member is in active service? Defined Contribution Plan
[end]		 Defined Benefit Plan
[go to question 2]
2. Are plan risks/rewards/costs shared by multiple employers? Multiple-Employer Plan
[go to question 3]		 Single Employer Plan
Employer reports the plan under the requirements for sole employers. This requires reporting the ARC and Net OPEB Obligation.
[end]
3. Is the plan administered as a formal trust?
  1. Irrevocable contributions
  2. Assets dedicated to retirees
  3. Assets are legally protected
 [go to question 4] [go to question 5]
4. Does a special funding situation exist? (One entity makes all contributions)

Note: This question is for the contributing entity/employer and not the plan. If one entity is legally responsible for substantially all of the legally required contributions, and that level of responsibility is ongoing and is unlikely to change significantly, that entity is encouraged (but not required) to apply the sole employer reporting requirements. Substantially all is not currently defined by GASB.		 Report as if Single Employer
Contributing entity reports the plan under the requirements for sole employers. This requires reporting the ARC and Net OPEB Obligation.
[end]		 Cost Sharing Multiple-Employer Plan
Employer reports their “contractually required contribution” (CRC). OPEB liability is limited to amount of CRC unpaid. GASB 24 provides standards for recognizing on behalf payments.
[end]
5. Does a special funding situation exist? (One entity makes all contributions)

Note: This question is for the contributing entity/employer and not the plan. If one entity is legally responsible for substantially all of the legally required contributions, and that level of responsibility is ongoing and is unlikely to change significantly, that entity is encouraged (but not required) to apply the sole employer reporting requirements. Substantially all is not currently defined by GASB.		 Report as if Single Employer
Contributing entity reports the plan under the requirements for sole employers. This requires reporting the ARC and Net OPEB Obligation.
[end]		 Agent Multiple-Employer Plan
Separate valuations for each employer. Each employer recognizes their share of the ARC & Net OPEB Obligation. The valuations are aggregated at the admin. level for plan reporting.
[end]