###### Gains and Losses on Pensions, Other Retirement Benefits or Other Post Employment Benefits Assumption Changes

**PREPARED BY:**

**UNITED STATES STANDARD GENERAL LEDGER DIVISION**

**ACCOUNTING SYSTEMS AND STANDARDS DIRECTORATE**

**GOVERNMENTWIDE ACCOUNTING**

**BUREAU OF THE FISCAL SERVICE**

**U.S. DEPARTMENT OF TREASURY**

# Version History

**Background**

Effective in fiscal year 2010, a Gains/Losses on long-term assumptions line was added to the Statement of Net Cost.  The line was added to implement Statement of Federal Financial Accounting Standard No. 33 (SFFAS), Pensions, Other Retirement Benefits, and Other Postemployment Benefits:  Reporting the Gains and Losses from Changes in Assumptions and Selecting Discount Rates and Valuation Dates. 

Statement of Federal Financial Accounting Standard No. 33 requires that gains and losses from changes in assumptions long-term obligations be highlighted on the Statement of Net Cost.  Highlighting the gains and losses will provide more transparent information regarding the underlying costs associated with these liabilities.  The standard applies to agencies that report liabilities and expenses for federal employee pensions, other retirement benefits (ORB), and other postemployment benefits (OPEB) including veterans’ compensation, in general purpose financial reports.  The Statement does not apply to the Federal Employees Compensation Act program. (Reference:  SFFAS No. 33)

The standard also requires disclosure of the components of the expense associated with federal employee pension, ORB, and OPEB liabilities in the notes to the financial statements. Such disclosure will provide useful information for analysis.  The information will be comparable across agencies and between postemployment and retirement programs.  Notes to the financial statements are not addressed in this scenario.

The FY 2010 and FY 2011 Statement of Net Cost crosswalk prepared by the USSGL Division, included a new line (Line 4: (Gains)/Losses on pension, ORB or OPEB Assumption changes) to implement SFAS No. 33.  USSGL Accounts, 7190, Other Gains, and 7290, Other Losses, was crosswalked to the line with a footnote, indicating to only report the portion of the balance in the account related to the change in long-term assumptions used to estimate actuarial liabilities.  All other amount balances recorded in the accounts should be reported on the appropriate lines on the Statement of Net Cost.  

To clearly capture the gains and losses amount and to eliminate the crosswalk footnote, the USSGL Division created four new USSGL Accounts to capture amounts related to the gains and losses on changes in long term assumptions.  The accounts are illustrated in this scenario. 

**USSGL ACCOUNTS**

**Effective FY 2012**

**Account Title:** Gains on Changes in Long-Term Assumptions – From Experience

**Account Number:** 7171 

**Normal Balance:** Credit

**Definition:**The gain on the change in long-term assumptions from experience used to estimate Federal employee pension, other retirement benefit, and other postemployment benefit liabilities, including veteran’s compensation. This account excludes amounts related to Federal Employees Compensation Act program.

**Justification:** The USSGL Statement of Net Cost crosswalk was revised to display costs related to gains and losses from changes in long-term assumptions displayed separately from other costs on the statement. The change included adding a new line (4) to the Statement of Net Cost, effective fiscal 2010. SFFAS No. 33, Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses from changes in Assumptions and Selecting Discount Rates and Valuation Dates (paragraph 1) indicates this change. (Reference: OMB Circular No. A-136, August 2010). Furthermore, actuarial gains and losses should be broken into two subcomponents (1) from experience and (2) from assumption changes.  

**Account Title:** Losses on Changes in Long-Term Assumptions – From Experience

**Account Number:**7172 

**Normal Balance:**Debit

**Definition:**The loss on the change in long-term assumptions from experience used to estimate Federal employee pension, other retirement benefit, and other postemployment benefit liabilities, including veteran’s compensation. This account excludes amounts related to Federal Employees Compensation Act program.

**Justification:** The USSGL Statement of Net Cost crosswalk was revised to display costs related to gains and losses from changes in long-term assumptions displayed separately from other costs on the statement. The change included adding a new line (4) to the Statement of Net Cost, effective fiscal 2010. SFFAS No. 33, Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses from changes in Assumptions and Selecting Discount Rates and Valuation Dates (paragraph 1) indicates this change. (Reference: OMB Circular No. A-136, August 2010). Furthermore, actuarial gains and losses should be broken into two subcomponents (1) from experience and (2) from assumption changes.  

**Account Title:**Gain on Changes in Long-Term Assumptions

**Account Number:** 7271 

**Normal Balance:** Credit 

**Definition:**The gain on the change in long-term assumptions used to estimate Federal employee pension, other retirement benefit, and other postemployment benefit liabilities, including veteran’s compensation. This account excludes amounts related to Federal Employees Compensation Act program.

**Justification:**he USSGL Statement of Net Cost crosswalk was revised to display costs related to gains and losses from changes in long-term assumptions displayed separately from other costs on the statement. The change included adding a new line (4) to the Statement of Net Cost, effective fiscal 2010. SFFAS No. 33, Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses from changes in Assumptions and Selecting Discount Rates and Valuation Dates (paragraph 1) indicates this change. (Reference: OMB Circular No. A-136, August 2010). Furthermore, actuarial gains and losses should be broken into two subcomponents (1) from experience and (2) from assumption changes.  

**Account Title:** Losses on Changes in Long-Term Assumptions

**Account Number:** 7272 

**Normal Balance:**Debit 

**Definition:**The loss on the change in long-term assumptions used to estimate Federal employee pension, other retirement benefit, and other postemployment benefit liabilities, including veteran’s compensation.  This account excludes amounts related to Federal Employees Compensation Act program.

**Justification:** The USSGL Statement of Net Cost crosswalk was revised to display costs related to gains and losses from changes in long-term assumptions displayed separately from other costs on the statement. The change included adding a new line (4) to the Statement of Net Cost, effective fiscal 2010. SFFAS No. 33, Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses from changes in Assumptions and Selecting Discount Rates and Valuation Dates (paragraph 1) indicates this change. (Reference: OMB Circular No. A-136, August 2010). Furthermore, actuarial gains and losses should be broken into two subcomponents (1) from experience and (2) from assumption changes.  

**REVISED USSGL ACCOUNTS**

**Effective FY 2012**

**Account Title:**Other Gains

**Account Number:**7190 

**Normal Balance:**Credit

**Definition:**The gain on assets resulting from events other than disposition. **This excludes amounts related to the gain on the change in long-term assumptions from experience and gain on the change in long-term assumptions for Federal employee pension, other retirement benefit, and other postemployment benefit liabilities, including veteran’s compensation. This account includes amounts related to Federal Employees Compensation Act program.**

**Justification:**  Modified definition to exclude amounts reported in USSGL accounts 7171, “Gains on changes in long-term assumptions – From Experience” and 7271, “Gain on changes in long-term assumptions.”  

**Account Title:** Other Losses

**Account Number:** 7290 

**Normal Balance:** Debit 

**Definition:**The loss on assets resulting from events other than disposition. **This excludes amounts related to the losses on the change in long-term assumptions from experience and losses on the change in long-term assumptions for Federal employee pension, other retirement benefit, and other postemployment benefit liabilities, including veteran’s compensation. This account includes amounts related to Federal Employees Compensation Act program.**

**Justification:**  Modified definition to exclude amounts reported in USSGL accounts 7172, “Losses on changes in long-term assumptions – From Experience” and 7272, “Losses on changes in long-term assumptions.”  

**Listing of USSGL accounts used in this scenario**

**USSGL PROPRIETARY ACCOUNT ATTRIBUTE TABLE**

**ATTRIBUTES REQUIRED FOR FACTS II REPORTING OF DETAILED FINANCIAL INFORMATION**

A beginning trial balance is not applicable in this scenario.

**Pre-closing Adjusted Trial Balance**

**Closing Entries**

**Post-closing Trial Balance**

**Balance Sheet**

**Statement of Net Cost**

**Statement of Changes in Net Position**