FASB ASC 715-60: Accounting for OPEB

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FASB ASC 715-60 establishes the accounting standard for other post-employment benefits (OPEB), including retiree healthcare. Issued by the Financial Accounting Standards Board , this standard defines how employers must record the expense and liability for OPEB in their financial statements. Under FASB ASC 715-60, the cost of retiree healthcare benefits is generally accrued over the employee’s working lifetime, aligning with the principles of accrual accounting.

Purpose for establishing standards for financial accounting and reporting of employer OPEB benefits

Before the introduction of FAS 106, many employers accounted for retiree healthcare and other OPEB costs on a pay-as-you-go basis. This approach, which recognized expenses only when paid, failed to align income and expenses, resulting in an incomplete financial picture of future OPEB liabilities. To address this issue, FASB established FAS 106 in 1990, introducing accrual-based accounting for OPEB. This method ensures that financial statements more accurately reflect the long-term cost of providing retiree benefits.

Extensive OPEB experience

Since 1989, Hogue & Associates has partnered with private companies and nonprofit organizations to navigate the complexities of retiree healthcare benefits. We specialize in helping employers minimize OPEB liabilities while maintaining meaningful benefits for employees and retirees. As experts in actuarial consulting for small plans, we’ve worked with clients from diverse sectors across the U.S., delivering customized solutions for their unique challenges.

Government	Nonprofit / Not for profit	Private
School districts	Religious organizations	Product manufacturers
California, Colorado, Louisiana, Montana, Oregon, Wisconsin, Wyoming	Dioceses of the Catholic Church Baptist Convention Affiliate Christian Fellowship Organization	California, Colorado, Kentucky, Indiana, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, Wisconsin, Washington
Universities	Private schools and clubs	Service providers
California State University, multiple campuses	California, New York, Pennsylvania, Ohio	Mississippi
Cities / Counties	Labor Unions	Natural resource management
California, Minnesota, Wisconsin, Wyoming	International Brotherhood of Electrical Workers Union (IBEW) National Electrical Contractors Association (NECA) United Firefighters of Los Angeles City	Wisconsin
Public Utility Districts	Electric Cooperatives	Financial institutions
Oregon, Utah	Kentucky, Wyoming	Pennsylvania
Fire Protection Districts	Community services agencies
Louisiana	California, Maryland, New York, Tennessee
Housing and Port Authorities	Professional Associations
California, Massachusetts	Human Resources, Aviation, Bowling
	Fraternal Benefit Society
	Ohio

The following documents are provided for historical reference, as FAS 106 has been replaced by FASB ASC 715-60. “Summary and Comments” by J. Richard Hogue, F.S.A., offers a detailed, paragraph-by-paragraph analysis of SFAS 106.

FAS 106 Summary and Comments

FAS 106 Decision Tree

Society of Actuaries Health Section News January 2002

Society of Actuaries Pension Section News February 2002

Comments to Actuarial Standards Board RE: ASOP No. 6 Draft

Comments to Actuarial Standards Board RE: ASOP No. 6 Draft Revision

~ Additional FASB ASC 715-60 Resources ~

Explore these trusted resources to deepen your understanding of FASB ASC 715-60 and its implications for your organization. For personalized guidance tailored to your needs, contact us today.

Financial Accounting Standards Board (FASB)

AICPA Employee Benefit Plan Resources

Employee Benefit Research Institute