The Governmental Accounting Standards Boards (GASB) released a new exposure draft in June 2019 entitled “Internal Revenue Code Section 457 Deferred Compensation Plans That Meet the Definition of a Pension Plan and Supersession of GASB Statement 32.” While a brief statement, the reporting requirements for 457 plans could be impacted.
According to the statement, 457 plans have evolved since the adoption of GASB 32, most notably through the fact that employers can now make contributions to the plans. The statement notes that such contributions are not the norm but occur enough to warrant further consideration. Prior guidance had stated that 457 plans with employer contributions were not considered “pension plans”; this statement would reverse that guidance. If adopted, GASB 32 reporting for such plans would be superseded by GASB 67/68 reporting.
Comments are being accepted on the exposure draft through September 27, 2019. The draft has a target effective date for plan years beginning after December 15, 2020, assuming there are no material changes or delays from the comments received.
The exposure draft can be found here.
Feel free to reach out to your Foster & Foster consultant with any questions you may have.