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nclm. \fAGUI QfMUllClMUlB AllmCllfollSLllW_CENIEJ , POIT CIIICE lOX. RAl.E1GH, NORTH CAliluNA l7lOl.llIIt 215NORTHDAWlONSlRIETllJIlll) _ltlllll~ fAlC:ltlll7lH5l1 www.NClM.ORG PIlOMOTING EXCELlENCE IN MUNICIPAl. GOVERNMENT League off.rs actuarial services to help cities and towns !comply with new GASB standards and to det.rmine costs of LEO separation allowance If your city or town pffers any benefits other than pension to your retirees, you must comply with two neW accounting standards from the Government Accounting Standards Board (GASB) - GASB rules 43 and 45. These standards will require you to determine the costs of retiree benefits (other than pensions) and show them as expenses on your f'iIlancial statements. Essentially, the new!standards mean that you will handle benefits for retirees in the same manner as you now handle pensions for retirees. Other than pension, the most common benefit for retirees is health insurance. Additional benefits include dental, vision, life, disabilitt, or long-term care. The new standards 40 not require you to advance fund these retirement benefits - rather than pay-as-you-go - but not doing so may have a negative effect on your audit or credit/bond rating. Advance funding means that you fund the retirement benefits during the working years of the employee rather than just paying out the benefit after he or she retires. The new standards a're being phased in, with the largest cities having to comply first. A schedule for com~liance is shown below. If you offer benefits ~o retirees, we recommend that you begin work on compliance with these new GASB rules. Although there are no specific penalties for failing to meet the standards, J)ot complying will have a serious negative effect on your . municipality's annu$! audit and your credit and bond ratings. To help you comply!with these rules, the League has negotiated for the services of Cavanaugh MacdonfId, an actuarial consulting firm based in the Atlanta suburbs. This rum has agr~ to conduct the necessary actuarial and valuation work necessary to comply with the $w GASB rules at costs that are siguificantly lower than if a city or town contracted With a firm individually. In addition, we have negotiated a group rate with Cavanaugq Macdonald for actuarial services necessary to determine the special separation allowance for law enforcement officers. I-z.