FASB ASC 715-60 Accounting Standard

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FASB ASC 715-60 is the accounting standard for other post employment benefits (OPEB) including post retirement healthcare. The Financial Accounting Standards Board issued this accounting standard to define how the expense and liability for post retirement healthcare and other non-pension benefits must be recorded for financial statement purposes. The FASB ASC 715-60 standard requires the cost of post retirement healthcare benefits to be accrued generally over the employee’s working lifetime.

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

For those without an accounting background, prior to the establishment of FAS 106 the common accounting practice for retiree healthcare and other non pension benefits (i.e. OPEB) was pay-as-you-go, i.e. the cost of OPEBs was recognized when the expense was paid. With this method, an OPEB plan’s income and expenses were not matched. As such, accounting for retiree benefits in this way didn’t provide an accurate financial picture of future OPEB liabilities in that it did not follow accrual accounting principles. The Financial Accounting Standards Board (FASB) established FAS 106 in 1990 so as to solve this problem.

Extensive OPEB experience

Since 1989, Hogue & Associates has consulted with private companies and non profit organizations on topics related to retiree helathcare benefits. We strive to help employers find ways to minimize their OPEB liability while maximizing employee and retiree benefits. 100% of our work is actuarial consulting on small plans. We serve clients from a broad range of sectors throughout the U.S.

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 for historical reference only as FAS 106 has been superseded by FASB ASC 715-60. Summary and Comments by J. Richard Hogue, F.S.A. is a 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