State of Michigan Roth 457 Accounts
Salary Schedules and Allowable Salary Increases
Employer Contributions Forfeiture Credit
Weekly workers' compensation reporting
Completing Final Payroll Detail Reports
Public Act 15 of 2025 healthcare reimbursement
Public Act 127 of 2024 healthcare contribution rate change
The Governmental Accounting Standards Board (GASB) Statement No. 68 is a financial reporting standard. It replaced the rules in Statement No. 27, Accounting for Pensions by State and Local Governmental Employers.
It requires employers in a multiple-employer cost-sharing plan to:
GASB 68 applies to the financial statements of all employers. It took effect for fiscal years that began after June 15, 2014.
Employers in the Michigan Public School Employees' Retirement System (MPSERS) had to use these rules in their financial statements for the fiscal year ending June 30, 2015. The amounts were based on the plan's fiscal year 2014, which ran from Oct. 1, 2013, through Sept. 30, 2014.
The net pension liability is the part of the total pension liability that isn't covered by investment assets. This amount appears as a line item on your Statement of Net Position. As a MPSERS participating employer, you must record your share of the net pension liability.
This liability is not new. It is a normal part of pension funding. A pension plan may have a net asset or a net pension liability, depending on whether its investments have more or less money than needed to pay future benefits.
MPSERS has had a net pension liability since the early 2000s. Market losses in 2008 and 2009 increased that liability.
The goal of prefunding is for the pension plan to be 100% funded over time. Because pension funding happens over many years, it is normal for the plan to be overfunded or underfunded during this period.
Each year, the pension plan's actuary calculates how much money is needed to fund the benefits that members have earned. The actuary compares that amount with the current market value of the plan's assets. The difference between the two amounts is the net pension liability.
The actuary uses estimates, called assumptions, to make these calculations. These assumptions include how long people work, how much they earn, when they retire, and how long they are expected to live.
Table 1, Schedule of Pension Amounts by Employer, shows the net pension liability for university and non-university employers. It also shows each employer's proportionate share, or assigned portion, of the net pension liability as of the measurement date, Sept. 30.
You can find these tables on the GASB 68 Pension page in the Data Tables tab.
No. The UAAL is based on the actuarial value of assets. The net pension liability is based on the market value of assets. GASB 68 addresses only the net pension liability. Although the two amounts may look similar, the difference is important for GASB 68 reporting.
No. The FY 2023 and FY 2025 147c(2) one-time deposit payments are not included in the required contributions for each reporting unit.
These one-time deposits are not part of the Actuarially Determined Contribution used in the valuation and are not part of the required contributions used to calculate each reporting unit’s proportionate share.
For each MPSERS fiscal year, from Oct. 1 through Sept. 30, ORS determines the total pension contributions required from all employers. ORS also determines the required pension contributions for each employer.
ORS and its actuary calculate each employer's proportionate share percentage. They divide the employer's required contributions by the total required contributions for all MPSERS employers. Universities and non-universities are calculated separately.
The actuary calculates the total net pension liability for universities and non-universities as of the Sept. 30 measurement date. The actuary then multiplies the total net pension liability or pension expense by the employer's proportionate share percentage.
A reporting unit's proportionate share for a year is based on the previous year's contributions.
The liability is reduced over time through the contribution rates.
The pension plan is designed to reduce the liability over time, much like paying off a home mortgage.
Employers don't need to take any additional action.
The liability will be paid off over time through the scheduled payment of the unfunded liability, following the same approach used in the past.
MPSERS is a multiple-employer cost-sharing plan. The State of Michigan has no employees in this plan and is not a participating employer in MPSERS.
Each employer participating in MPSERS must record its share of the pension liability and pension expense.
The State of Michigan provides retirement benefits for its own employees through a different retirement plan. That plan has its own reporting requirements under GASB 67 and GASB 68. These requirements are reflected in the state's comprehensive annual financial report.
The Michigan Office of Retirement Services administers several retirement systems. Each retirement system is separate.
Pension expense is the yearly cost of providing pension benefits. Each MPSERS employer must record its proportionate share of the pension expense.
GASB 68 requires employers to calculate pension expense using a specific method. This method includes service (normal) cost, which is the cost of benefits earned during the year. It also includes other basic expenses, such as the cost of administering the pension plan.
The calculation also includes deferred inflows of resources, which reduce pension expense, and deferred outflows of resources, which increase pension expense.
Examples of deferred inflows and deferred outflows include differences between projected and actual investment returns. They also include differences between expected and actual actuarial experience.
GASB 68 sets the number of years over which these amounts must be recognized. The time period depends on several factors. GASB 68 also requires each MPSERS employer to record its proportionate share of the pension expense.
Review the Glossary for a complete list of pension expense items.
No. GASB 68 and 75 are financial reporting standards. They separate pension and other postemployment benefits (OPEB) funding from financial accounting.
Earlier GASB standards required pension and OPEB plans to calculate the annual required contribution (ARC) and report payments made toward the ARC. This measured how well the plan funded its yearly pension and OPEB obligations.
GASB 68 and 75 focus only on how pension and OPEB liabilities and expenses are recorded and reported in financial statements. For GASB 68 and 75, ARC is no longer a relevant term.
It depends on the accounting method your organization uses.
Public schools and other organizations that use the modified accrual basis of accounting don't need this information for budgeting. The way the Pension Fund is funded hasn't changed.
Community colleges, universities, and other organizations that use full accrual accounting must budget for the Pension expense, but not for the contributions.
These financial reporting changes affect only your reporting unit's government-wide, full accrual financial statements, beginning with fiscal year 2015.
GASB 68 and 75 are for financial reporting only. They do not affect or change how reporting units fund retirement costs.
The liability and related expenses are reported only in your government-wide financial statements, including the Statement of Net Position and the Statement of Activities. They are also reported in any full accrual funds that include payroll costs. They are not reported in your modified accrual fund-level statements.
Note: Public Act 92 of 2017 changed future pension funding methods. However, those changes are not related to the adoption of GASB 68 or 75.
GASB 68 and 75 don't change regular payroll reporting.
No. Credit rating agencies have known about the funding policies and financial status of government pension plans for many years. They have already considered this information when evaluating an organization's ability to repay its debts.
No. Rate stabilization is related to funding the pension system. GASB 68 and 75 apply only to financial reporting.
Talk with your certified public accountant (CPA) and professional auditor.
You can also review GASB Statements No. 68 and 75 and their Implementation Guides on the GASB website. You can find them under the Standards & Guidance tab on the Pronouncements page. Pronouncements is another word for statements.
Discuss this issue with your certified public accountant (CPA) and professional auditor.
GASB sets the rules for financial accounting.
GASB 68 requires reporting units to record the net pension liability and pension expense.
Contact ORS Employer Reporting at ORS_Web_Reporting@Michigan.gov.
GASB Statement No. 75 is an accounting and financial reporting standard for other postemployment benefits (OPEB). OPEB includes retiree healthcare benefits and other benefits provided after employment ends, excluding pensions.
Like GASB 68 for pensions, GASB 75 sets rules for reporting OPEB.
GASB 75 was issued in June 2015. It created new accounting and financial reporting requirements. For the first time, employers with retirement plans across the country, including the Michigan Public School Employees Retirement System (MPSERS), must report the net OPEB liability in their financial statements.
GASB 75 replaced the requirements in GASB Statements No. 45 and 57.
It requires employers in a multiple-employer cost-sharing plan to:
GASB 75 is effective for fiscal years beginning after June 15, 2017.
The net OPEB liability is the part of the total OPEB liability that is not covered by investment assets.
This amount appears as a line item on your Statement of Net Position.
As a MPSERS participating employer, you must record your proportionate share of the net OPEB liability.
This liability is not new. It is a normal part of OPEB funding. An OPEB plan may be overfunded or underfunded, depending on the value of its investments.
The net OPEB liability equals the plan's total OPEB liability minus the market value of the plan's assets.
Each year, ORS and its actuary calculate each reporting unit's proportionate share of the net OPEB liability and OPEB expense. A reporting unit's proportionate share for a year is based on the previous year's contributions.
OPEB expense is the yearly cost of providing the retiree healthcare benefit for members who receive the premium subsidy.
Each MPSERS employer must record its proportionate share of the OPEB expense.
GASB 75 requires employers to report OPEB expense using a method that includes service (normal) cost, which is the cost of benefits earned during the year. It also includes other basic expenses, such as the cost of administering the healthcare benefit.
The calculation also includes deferred inflows of resources, which reduce OPEB expense, and deferred outflows of resources, which increase OPEB expense.
Examples of deferred inflows and deferred outflows include differences between projected and actual investment returns. They also include differences between expected and actual actuarial experience.
GASB 75 sets the number of years over which these amounts must be recognized. The time period depends on several factors.
GASB 75 also requires each MPSERS employer to record its proportionate share of the OPEB expense.
Like GASB 68, GASB 75 is for financial reporting only. It does not affect or change how reporting units fund retirement costs.
The liability and related expenses are reported only in your government-wide financial statements, including the Statement of Net Position and the Statement of Activities. They are also reported in any full accrual funds that include payroll costs. They are not reported in your modified accrual fund-level statements.
Note: Public Act 92 of 2017 changed future pension funding methods. However, those changes are not related to the adoption of GASB 75.
It depends on the accounting method your organization uses.
Public schools and other organizations that use the modified accrual basis of accounting do not need this information for budgeting. The way the Retiree Healthcare Fund is funded has not changed.
Community colleges, universities, and other organizations that use full accrual accounting must budget for the OPEB expense, but not for the contributions.
These financial reporting changes affect only your reporting unit's government-wide, full accrual financial statements, beginning with fiscal year 2018.
No. GASB 75 applies only to contributions for the premium subsidy benefit. These contributions are paid into the retiree healthcare fund.
The Personal Healthcare Fund (PHF) benefit is a Defined Contribution Plan benefit. It is not affected by GASB 75.
Talk with your certified public accountant (CPA) and professional auditor.
You can also review GASB Statements No. 68 and 75 and their Implementation Guides on the GASB website. You can find them under the Standards & Guidance tab on the Pronouncements page. Pronouncements is another word for statements.
There are separate data tables for pension and OPEB.
Pension data tables are numbered 1 through 5. OPEB data tables are numbered 5 through 9.
N stands for non-university employers. K-12 districts, Intermediate school districts, charter schools, public school academies, libraries, and community colleges should use Tables N1 through N9.
U stands for university employers. University employers should use Tables U1 through U9.
Table 1 is a schedule of pension amounts by employer.
It shows pension contributions, proportionate share percentage, net pension liability, and pension expense. The information is grouped under headings based on the type of data required.
Table 6 provides the same information for the OPEB plan.
Tables N1 and U1 are on the GASB 68 (pension) section of the website. Tables N6 and U6 are on the GASB 75 (OPEB) section.
Use the table that matches your employer type. Use N tables for non-university employers and U tables for university employers.
Table 2 is a schedule of deferred resources by year for each employer in the pension plan. It shows the amounts of deferred resources that will be applied to pension expense in future years. You need this information for the Notes to the Financial Statements.
Table 7 provides the same information for the OPEB plan.
Tables N2 and U2 are on the GASB 68 (pension) section of the website. Tables N7 and U7 are on the GASB 75 (OPEB) section.
Use the table that matches your employer type. Use N tables for non-university employers and U tables for university employers.
Tables 3 and 8 provide detailed information about the recognition of inflows and outflows of resources shown in Tables 1 and 2 and Tables 6 and 7.
Tables 4 and 9 provide detailed information about the recognition of deferred inflows and deferred outflows of resources shown in Tables 1 and 2.
Table 5 shows covered payroll as of Sept. 30, which is the measurement date, and as of June 30, which is the end of the employers' fiscal year.
You need this information to complete the Required Supplementary Information (RSI) schedules.
Because the covered payroll amount is the same for both pension and OPEB, use Tables N5 and U5 for both the GASB 68 RSI schedules and the GASB 75 RSI schedules.
Note: GASB Statement No. 82 defines covered payroll as the payroll used to calculate contributions to a pension plan. GASB Statement No. 85 defines covered payroll as the payroll used to calculate contributions to the OPEB plan.
For university employers, covered payroll for both pension and OPEB is the greater of:
For non-university employers, covered payroll is the payroll used to calculate contributions to both plans.
You can find instructions for using the data tables in the Data tabs on the GASB 68 Pension and GASB 75 OPEB pages.
Employers are listed by Reporting Unit number, not by their Michigan Department of Education organization number.
The data is separated by employer type. Universities are listed in one set of tables. Non-university employers, including K-12 districts, charter schools/PSAs, libraries, and community colleges, are listed in another set.
Be sure to use the table that matches your employer type.
Yes. ORS publishes new data tables on this website each year. They are available in time for you to prepare your financial statements.
ORS will notify you when the GASB 68 and GASB 75 materials are ready to use each year.
Financial statements usually include a section called Notes to the Financial Statements.
GASB 68 and 75 require employers to include more information in these notes than in the past.
The Sample Notes to Financial Statements section of this website provides sample language that you can use in your financial statements.
ORS presents the required information in two notes:
This format is only a suggestion. GASB Statements 68 and 75 require only that your financial statements include the information shown in these sample notes.
You may copy and paste the sample language from this website into your financial statements.
Add the information from your employer's data tables where brackets show that information is needed.
ORS provides this sample language as a courtesy. However, each employer is responsible for its own Notes to the Financial Statements. You should review the language with your auditor.
When you use the sample language, you may replace the words "the employer" with the name of your reporting unit.
Yes. UAAL Rate Stabilization payments are included in the GASB materials as statutorily required pension and OPEB contributions.
First, subtract your net pension liability as of Sept. 30 of the previous year, shown in last year's report, from your net pension liability as of Sept. 30 of the current year, shown in Table 1, Column F.
Next, divide that difference by the amount in Table 1, Column F from last year's report.
Then multiply the result by 100 to calculate the percentage increase.
If the result is a negative number, it is a percentage decrease.
To calculate the percentage increase or decrease for the Net OPEB Liability, follow the same steps using Table 6, Column F.
Financial statements usually include a section called Required Supplementary Information (RSI).
GASB 68 and 75 require employers to include more information in this section than in the past.
The RSI section must include four schedules that show a 10-year history of data. Two schedules are for pension contributions, and two are for OPEB contributions.
The Sample Required Supplementary Information tabs of the GASB website provide schedule templates and sample language for your financial statements.
The RSI schedules are available as PDF documents. You may create your own schedules using the examples provided by ORS.
Each year, ORS provides some of the data needed for these schedules. You must provide the remaining data. As an employer, you are responsible for maintaining your reporting unit's schedules. Keep data from previous years and add new data each year.
The GASB 68 RSI schedules begin with fiscal year 2014.
The GASB 75 RSI schedules begin with fiscal year 2017.
The RSI schedules are designed to show 10 years of data.
The sample RSI schedules provided by ORS include enough columns to meet this requirement. Until 10 years of data are available, include only the years for which you have information.
Each year, add a new column with the latest data and keep the previous years' data.
Once you have 10 years of data, remove the oldest year each year as you add the newest year. This keeps a rolling 10-year history.
For GASB 68 and 75, a covered employee is an employee for whom the employer must make contributions to cover the unfunded accrued actuarial liability (UAAL).
Public Act 184 of 2022 removed the requirement to pay UAAL contributions for MPSERS retirees who return to direct or indirect public school employment.
