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CHAPTER 4.3.9
GAAP ADJUSTMENTS AND RECLASSIFICATION ENTRIES
LIABILITIES: OTHER POSTEMPLOYMENT BENEFITS OBLIGATION
1
GAAP POLICIES AND PROCEDURES
The Other Postemployment Benefits (OPEB) obligation includes the CSU’s estimated funding
liability of the State administered and sponsored plan as of the fiscal year end. The State’s
actuary has employed methods and assumptions considered reasonable and appropriate given
the information currently available. Given the inherent uncertainty in the nature of such
estimates, future amounts may deviate from those estimates.
In accordance to GASB pronouncements, CSU is required to recognize the cost of OPEB on
an accrual basis.
Postretirement Healthcare Plan
The State provides retiree healthcare benefits to statewide employees, including the University
employees, through the programs administered by CalPERS. The State’s substantive plan
represents a substantive single-employer defined benefit OPEB Plan, which includes medical
and prescription drug benefits (collectively, healthcare benefits) to the retired University
employees. The University provides dental benefits to eligible University’s retirees. Eligible
retirees receive healthcare and dental benefits upon retirement at age 50 with 5 years of service
credit.
For healthcare benefits, CalPERS offers Preferred Provider Organizations (PPOs), Health
Maintenance Organizations (HMOs), and Exclusive Provider Organizations (EPOs) (limited
to members in certain California counties); for dental benefits, a Dental Maintenance
Organization (DMO) and dental indemnity plans to the University’s retirees. Health plans
offered, covered benefits, monthly rates, and copayments are determined by the CalPERS
Board, which reviews health plan contracts annually.
The contribution requirements of retirees and the State are established and may be amended
by the State legislature. For healthcare benefits, the State makes a contribution toward the
retiree’s monthly health premiums, with the retirees covering the difference between the
State’s contribution and the actual healthcare premium amount. The State contribution is
normally established through collective bargaining agreements. No retiree contribution is
required for dental benefits.
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Postemployment Benefits Obligation | June 30, 2015
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Funding Policy
For healthcare benefits, responsibility for funding the cost of the employer share of premiums
is apportioned between the State and the University based on “billable” and “nonbillable”
accounts. Billable accounts have special revenue sources such as fees, licenses, penalties,
assessments, and interest, which offset the costs incurred by a State department during the year.
The University reimburses the State for retiree’s health benefit costs allocated to billable
accounts but not for costs allocated to nonbillable accounts. The University is responsible for
funding the costs of the billable accounts on a pay-as-you-go basis as part of the statewide
general administrative costs charged to the University. The State is responsible for funding the
cost of the employer share of healthcare premiums of retirees for all nonbillable accounts.
The University is responsible for paying the cost of dental benefits for all University retirees
using funds provided by the State through general fund appropriations. The University makes
payments directly to Delta Dental for the retiree’s monthly dental premiums. The University
is paying these benefits on a pay-as-you-go basis.
2
RELEVANT ACCOUNTING LITERATURE
GASB Statement No. 43, Financial Reporting for Postemployment Benefit Plans and Other
than Pension Plans
GASB Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions
3
OBJECTIVES OF GAAP ADJUSTMENTS
 To reverse accrual of other postemployment benefits obligation made in prior year.
 To accrue other postemployment benefits obligation as of year-end.
4
GAAP ACCOUNTING T REATMENT AND JOURNAL ENTRIES
4.1 RELATED GAAP ACCOUNT(S)
712209 - Other postemployment benefits obligations
722002 – Benefits
4.2 BILLABLE VERSUS NONBILLABLE ACCOUNTS
The OPEB obligation includes the employer’s share of health and dental benefits for
retirees, and are classified as billable and nonbillable accounts. Billable accounts are
State funds that (1) have special revenue sources, such as fees, licenses, penalties,
assessments, interest, etc., and (2) support a State department. For nonbillable accounts,
the State is responsible and pays for the cost of the employer’s share of health benefits
for retirees. The State also pays for the cost of the employer’s share of health benefits
for retirees for billable accounts but allocates the cost to the CO through the State’s pro
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rata process. The CO then allocates this cost to the campuses, which only includes the
health benefits portion for the billable accounts. The CO pays for the cost of the employer
share of dental benefits for retirees for both billable and nonbillable accounts, and does
not allocate this cost to the campuses. Because of this, only the health benefits portion
of the OPEB obligation for the billable accounts is allocated to and accrued by the
campuses.
OPEB Obligation
Health Benefits
Dental Benefits
Billable Accounts
The State allocates to the CSU.
Cost is allocated to and accrued
by campuses.
Accrued by the CO. No
allocation to campuses.
Nonbillable Accounts
Paid by the State. No accrual by
the CSU.
Accrued by the CO.
allocation to campuses.
No
As an agency of the State, the CSU is included in the State’s OPEB actuarial study.
Therefore, the amounts of annual required contribution (ARC), employer contributions,
and net OPEB obligation (NOO) are all provided by the State Controller’s Office (by State
fund). The CO estimates the portion of the OPEB obligation related to health benefits
based on the percentage of each campus’ health benefits contributions compared to the
total employer contributions. The CO allocates this estimated health benefits portion of
the OPEB obligation to campuses based on the campuses’ retirement expenses (object
code 603005) for the billable funds recorded in the legal-basis accounting records.
The following CSU funds are considered billable:
CSU
Fund
441
442
443
444
452
462
471
472
473
474
496
531
532
533
534
535
536
537
560
561
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CSU Fund Description
Type
Program
TF CERF Extended Education
TF CERF-Construction
TF CERF-Maintenance and Equipment
TF CERF-Campus Partners
TF Facility Revenue Fund-Health Facilities Fee
TF Campus Union Operating Revenue Trust
TF Parking Revenue Fund-Fines and Forfeitures
TF Parking Revenue Fund-Parking Fees
TF Parking Revenue Fund-Construction
TF Parking Revenue Fund-Maintenance and
Equipment
TF Miscellaneous Trust
TF Housing-Operations and Revenue
TF Housing-Maintenance and Repair
TF Housing-Construction
TF Campus Union-Operations and Revenue
TF Campus Union-Maintenance and Repair
TF Campus Union-Construction
TF Auxiliary Org.-Operations and Revenue
TF Cal State Online
TF Cal State Online Program Reinvestment
Billable
Billable
Billable
Billable
Billable
Billable
Billable
Billable
Billable
CERF
CERF
CERF
CERF
Health
Union
Parking Fines
Parking Fees
Parking Fees
SCO
Fund
0948
0948
0948
0948
0948
0948
0948
0948
0948
Billable
Billable
Billable
Billable
Billable
Billable
Billable
Billable
Billable
Billable
Billable
Parking Fees
Trust
Housing
Housing
Housing
Union
Union
Union
Auxiliary Operations
CERF
CERF
0948
0948
0948
0948
0948
0948
0948
0948
0948
0948
0948
GAAP Manual | GAAP Adjustments and Reclassification Entries – Liabilities: Other
Postemployment Benefits Obligation | June 30, 2015
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The allocation entries to record the OPEB obligation as of year-end per campus will be
provided by the CO. Campus should record the OPEB obligation journal entry based on
the GASB 45 template provided by the CO. The schedule is posted on the CO website
and emailed via SFSR_GAAP@calstate.edu as discussed in Chapter 5 GAAP Adjustments
of Reclassifications that Require Information from the Office of the Chancellor.
EXAMPLE
The current year ARC $3,000,000, employer contribution $2,000,000, and NOO
$1,000,000 are allocated to the State fund and CSU fund 0948.XXX of the campus. In
prior year, ARC is $2,000,000, employer contribution $1,500,000, and NOO $500,000 are
allocated to the state fund and CSU fund 0948.XXX of the campus.
Reverse Prior Year Balance
NOTE: Campuses should NOT reverse the prior year OPEB obligations accrual until the
current year-end accrual from the CO is ready for posting. This is to avoid an out-ofbalance situation in the initial reporting package in TM1, which is typically due before the
current year’s OPEB obligation is recorded.
Account
Account Name
712209
Other postemployment benefits obligations
722002
Benefits
Journal
Description
To properly reverse 6/30/PY OPEB liability.
Fund
(Net
Position)
881 –
Unrestricted
881
–
Unrestricted
Program
Class
(CSU
Fund)
90
496
Various
496
Program
Class
(CSU
Fund)
Various
496
90
496
Amount
$500,000
($500,000)
Record Current Year Balance
Account
Account Name
722002
Benefits
712209
Other postemployment benefits obligations
Journal
Description
To properly reverse 6/30/PY OPEB liability.
Fund
(Net
Position)
881
–
Unrestricted
881 –
Unrestricted
Amount
$1,000,000
($1,000,000)
The campus must record a GAAP adjustment to accrue the NOO, which is the difference
between the ARC and the employer contribution. Refer to the Legal Manual in Chapter 6
Extended Education (EE), 3.4.1 Centrally Paid Costs for State Overhead (Pro Rata) for
more information on recording employer contribution. The ARC and the employer
contribution are required for footnote disclosure only and will be entered by the CO in Note
19 Other Post-Employment Benefits Obligation in the YES (TM1) reporting package. The
campus needs to validate the numbers in the note in YES with the allocation schedule
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Postemployment Benefits Obligation | June 30, 2015
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provided for recording the GAAP adjusting entries. The ARC, contribution, and NOO
should agree between the note in YES and the allocation schedule.
NOTE: Campuses should only record OPEB obligations in the CSU funds which have
recorded payroll expenses. For instance, the general fund (CSU fund 001) usually does
not record payroll expenses and therefore should not have any OPEB obligations recorded.
5
REFERENCE TOOLS
5.1 TABLES OF OBJECT CODE AND CSU FUND DEFINITIONS
http://www.calstate.edu/SFSR/standards_and_rules/2014/Tables-of-Object-Code-andCSU-Fund-Definitions-Updated-10-30-14.xls
5.2 PASSDOWN SCHEDULES
http://www.calstate.edu/sfsr/gaap/ under Passdown Schedules and by selecting the most
recent fiscal year.
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REVISION CONTROL
Document Title:
CHAPTER 4.3.9 – GAAP ADJUSTMENTS AND RECLASSIFICATION ENTRIES
– LIABILITIES: OTHER POSTEMPLOYMENT BENEFITS OBLIGATION
REVISION AND APPROVAL HISTORY
Section(s)
Revised
General
4.03.9-6
Summary of Revisions
Previously in Chapter 5.6.
Revision
Date
April 2015
GAAP Manual | GAAP Adjustments and Reclassification Entries – Liabilities: Other
Postemployment Benefits Obligation | June 30, 2015