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Business and Policy Areas
Business and Policy Areas

GASB Reissues OPEB Exposure Draft

January 30, 2004

After considering the comments it received, on January 30, 2004 the Governmental Accounting Standards Board (GASB) released a revised Exposure Draft (ED) on Other Post Employment Benefits (OPEB) 

The GASB now believes that implicit rate subsidies should not be exempted from a college’s calculation of its OPEB costs and obligations. An implicit rate subsidy occurs when retirees participate in the same healthcare plan as active employees and pay premiums that do not necessarily reflect the age-graded claims cost for retirees. Even though retirees pay 100% of their premiums, the premium is considered subsidized because the lower risk of younger employees reduces the premium charged to retirees.

NACUBO survey results for 168 public institutions indicate that 25% of institutions have an implicit subsidy and will be affected by this change. Public institutions should pay close attention, comments are due to the GASB by April 30, 2004 and the GASB intends to finalize the employer ED by June 30, 2004. All members are strongly encouraged to use the 90-day comment period to respond to the GASB.

The ED can be downloaded from the GASB web site,