Public Finance, Not Wall Street Profit: Public Pensions Story Behind the Story -- GASB 45

March 2011

In public finance and Municipal government, the new story is public pensions. Along with public pensions is a thing called "other post-employment benefits"...or OPEB's. But the story behind the story is a thing called GASB 45.

On the corporate, stock side there is a thing called FASB...Financial Accounting Standards Board. On our side -- Municipal, State and Local Governments, public finance and Muni Markets -- we have GASB...or Government Accounting Standards Board.

Some time ago, and I mean years ago, it was clear that State and Local structural budget imbalances and pension and OPEB imbalances were a problem and would become an even bigger problem. GASB rule #45 called on Municipalities to begin reporting, as in financial reporting, their pension and OPEB liabilities. What are the pension dollar needs, how much has been funded, how much is needed to make up, unfunded, underfunded and so on?????

GASB 45 is more than six years has been a decade in the making. So what is happening now with Meredith Whitney, Wisconsin, massive State budget deficits and so on is no shock.