The Governmental Accounting Standards Board (GASB) is in the process of deliberating proposed amendments to the pension reporting standard for state and local governments.Among other changes the amendments would require governments to report as a liability on their Balance Sheets (called Statements of Net Assets) the unfunded portion of their pension plans.A study done by the Institute for Truth in Accounting determined that under current accounting standards less than 10% of the $358 billion of unfunded pension liability was reported on states’ 2009 balance sheets.

The GASB requested comments from the public regarding these amendments.The comment letters did not come from a broad range of users of the financial information.Unfortunately it appears that ninety five percent of the GASB comment letters come from state and local governments, retirement systems, their employees, their affiliated organizations and consultants that do business with public pensions such as pension actuaries, accountants, auditors and the like.More than 50 percent of the comment letters seem to be form letters of a campaign orchestrated by one or more of these groups.

A couple of comment letters expressed two opposing extreme views.One stated,

“With reference to the project Pension Accounting and Financial Report for State and Local Government, I frankly think it is gross negligence not to have previously had the level of transparency regarding these future liabilities that citizens could understand. Lack of transparency allows both politicians and administrators to incur liabilities far beyond what any normal company would be allowed.”Later in this letter the writer commented, “What you are doing with the Project is to be applauded but frankly it is at least 25 years too late. I urge a sense of urgency in implementing proper accounting treatment.”

Another letter felt just the opposite stating, “I think you must be cruel and mad to want to destroy public pension funds' solvency. The requirement for multiple-employer cost-sharing systems (such as Ohio PERS) to allocate the net pension liability to all the employers that participate in the plan will destroy Ohio PER. Anyone with an 8th grade education can easily see the corruption behind your sick motivations.”