The Governmental Accounting Standards Board (GASB) has issued two documents outlining proposed amendments to the existing pension standards. The reforms are intended to improve how costs and obligations associated with government pensions are calculated and reported.
In San Jose the City Auditor's office has re-examined their pension liabilities under the proposed GASB guidelines, and found the city's unfunded pension liabilities will nearly double, from $1.1 billion to $2.1 billion.
These new accounting rules could reduce California city and county net assets, by requiring them to recognize their pension liabilities in all financial statements. Exposing these liabilities on government books could force some cities into formal bankruptcy.
The question is, how will these new rules impact Nevada County and City pension reporting? Inquiring minds want to know? Stay tuned for the answer.
Update( 08-01-11, 12:10) A regular reader sent this e-mail, with a "Here we go." This is just the begining: Cash strapped RI city files for bankruptcy.
The state-appointed receiver overseeing Rhode Island's cash-strapped Central Falls on Monday filed for bankruptcy on the city's behalf in an effort to solve its fiscal crisis.
Receiver Robert G. Flanders described the step as one of last resort after city taxes had been raised and services cut "to the bone," and after municipal retirees and current workers failed to agree on deep -- but voluntary -- cuts to their pensions and benefits. [My emphasis added]