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CITY OF SAN LEANDRO MEMORANDUM ON INTERNAL CONTROL FOR THE YEAR ENDED JUNE 30, 2014 SCHEDULE OF OTHER MATTERS 2014-01: New GASB Pronouncements or Pronouncements Not Yet Effective The following comment represents new pronouncements taking affect in the next few years. We have cited them here to keep you abreast of developments: Effective Fiscal 2015: GASB 68 - Acc_o_untineand Financial Reporting for Pensions (an amendment of GASB 27 This Statement will have material impact on the City's financial statements. The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for pensions. This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and expense/expenditures. For defined benefit pensions, this Statement identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. hi financial statements prepared using the economic resources measurement focus and accrual basis of accounting, a single or agent employer that does not have a special funding situation is required to recognize a liability equal to the net pension liability. The net pension liability is required to be measured as of a date no earlier than the end of the employer's prior fiscal year (the measurement date), consistently applied from period to period. Note disclosure and required supplementary information requirements about pensions also are addressed. Distinctions are made regarding the particular requirements for employers based on the number of employers whose employees are provided with pensions through the pension plan and whether pension obligations and pension plan assets are shared. The following are the major impacts: • This Statement requires the liability of employers and noriemployer contributing entities to employees for defined benefit pensions (net pension liability) to be measured as the portion of the present value of projected benefit payments to be provided through the pension plan to current active and inactive employees that is attributed to those employees' past periods of service total pension liability), less the amount of the pension plan's fiduciary net position. • Actuarial valuations of the total pension liability are required to be performed at least every two years, with more frequent valuations encouraged. If a valuation is not performed as of the measurement date, the total pension liability is required to be based on update procedures to roll forward amounts from an earlier actuarial valuation (performed as of a date no more than 30 months and 1 day prior to the employer's most recent year-end).