The current Governmental Accounting Standards Board (GASB) statements pertaining to Pensions and Other Post-Employment Benefits (OPEB) require that an actuarial valuation of the total liabilities be performed at least biennially for accounting and financial purposes. For such actuarial valuations, the total liabilities should be determined as of a date no more than 24 months (GASB 67 and 74) or 30 months and 1 day (GASB 68, 73 and 75) earlier than the most recent fiscal year end.
Since a full actuarial valuation is required to be performed, in essence, every other year, the valuation is valid for financial reporting for 2 years. However, the liabilities must be updated and rolled forward in the “off” years to meet the liability measurement date requirements per GASB. We refer to this process as preparing table updates, where we essentially update the liabilities determined in the valuation and estimate what these figures should be worth 12 months forward.
Below is a quick example of the timing and preparation of either a full actuarial valuation or table updates for typically used valuation dates and their respective reporting periods (which could vary depending on the specific circumstances):
|Valuation or Table Update||If you have a 6/30 valuation Date||If you have a 12/31 Valuation Date|
|Full Valuation||As of 6/30/2021 (FYE reporting 6/30/2022)||As of 12/31/2021 (FYE reporting 12/31/2022)|
|Table Update||For FYE reporting 6/30/2023||For FYE reporting 12/31/2023|
|Full Valuation||As of 6/30/2023 (FYE reporting 6/30/2024)||As of 12/31/2023 (FYE reporting 12/31/2024)|
|Table Update||For FYE reporting 6/30/2025||For FYE reporting 12/31/2025|
Typically, we will begin reaching out to those with a 6/30 valuation date in late summer/fall of the valuation year to begin the proposal process, so the valuation is prepared in plenty of time for reporting the following year end. For those with a 12/31 valuation date, we generally will begin in spring/early summer. Of course, if you would like to begin the process earlier, we are more than happy to do so. In some cases, it is necessary for us to being the process earlier as the valuation will be used for reporting on financial statements a year earlier than usual (we’ll explore this further in another blog so stay posted!).