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1 CITY OF ROSEVILLE EMERGING ISSUES December 31, 2014 111 ACCOUNTING STANDARD UPDATE—ACCOUNTING FOR PENSIONS (CONTINUED) • PERA have been proactive in steps toward implementation and the outlook for reporting to members appears good,based on current plans -the hope is that most of the implementation ' will be a"plug-in" of PERA generated data • PERA both have a June 30 fiscal year-end—this is the measurement date you will utilize for your presentation in your June 30 financial statements twelve months subsequent to that date • Other Deferred Inflows/Outflows will include: differences between expected and actual economic experience and investment earnings, changes in assumptions and changes in employer proportion and difference between contributions and proportionate share of pension ' expense • Required Supplementary Information will be two separate schedules—Schedule of Changes in Net Pension Liability and Related Ratios & Schedule of Contributions - 10-year presentation for each with notes • GASB 71 clarifies that in the year of implementation you must determine the deferred outflows associated with pension contributions made subsequent to the measurement date— even if it is not practical to determine the other deferred inflows and outflows 1 PERA: • Perform annual actuarial valuations to determine funded status and liabilities • Require plan actuary to calculate collective amount of items requiring deferred treatment • Engage external auditor or audit actuarial census data and schedule of employer's proportionate share • Communicate results to the local governments 1 • Provide RSI and suggested footnotes Local Impacts: • Your City's proportionate share of the plan's net pension liability will be recognized as a liability on your City's government-wide statements. As of December 31, 2014, PERA has estimated the liability for your city to be $ 6,872,441, based on the total unfunded liability as of their June 30, 2014 year end. • Expenditures will continue to be tracked in the fund statements for your statutory contributions,but a reconciling item will be needed to adjust these contributions with your 1 government-wide expenses which will be represented by the change in the net pension liability • As a result, your financial statements/financial position will be immediately impacted by 1 funding shortfalls at the pension plan • Additional RSI presenting 10 years of information regarding net pension liability, required & actual contributions and related ratios • Adds more extensive note disclosures, including sensitivity analysis of investment return assumption • Requires employer to track annual balances of deferred outflows of resources and inflows of resources. • Must describe signification assumptions and other inputs used to measure total pension liability. 1 1 19