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Government Finance Officers Association Recommends Best Practices for Pension Obligation Disclosure

"The Government Finance Officers Association document properly identifies materiality to an investor as the key consideration underlying good disclosure practice. While facts and circumstances may differ for each debt offering, including the type of securities offered, the financial health of the municipality, its form of pension plans, and funding ratios and contribution requirements, enhanced disclosure should address a municipality's pension obligations within the broader context of its financial resources and competing obligations."

The Government Finance Officers Association's List of Best Practices for Public Pensions

"The GFOA committee on retirement and benefits administration deserves high praise for its thoughtful work and leadership in this problematic realm of retirement-plan finance. Other national associations in the public pension field would serve their members well by adopting equally informative and detailed guidance on governance practices, instead of general platitudes that fail to instruct trustees on the difficult decisions they need to make in the high-stakes world of pension finance. State legislatures and oversight bodies would likewise do well to adopt and codify the key principles embodied in GFOA's recommendations concerning board composition, trustees' fiduciary obligations, campaign finance and activities of marketers."

Guidelines Issued by Government Finance Officers Association Address Public Pension Funding

"[T]he guidelines recommend that state and local governments follow five tenets to create a sound funding policy and make reporting easier: [1] Base the policy on actuarially-determined contributions. [2] Commit to meeting funding targets. [3] Ensure that benefit costs are paid by the generation of taxpayers receiving the services. [4] Manage contributions so that employer costs remain consistent as a percentage of payroll over time. [5] Promote accountability, transparency, and the ability to maintain contributions at a stable percent of payroll."

Designing and Implementing Sustainable Pension Benefit 'Tiers' for Government Employees

[Many state and local governments] are changing the structure of their employee pension benefits.... to limit existing pension benefits to current employees and create lower-cost pension benefit tiers for new employees.... In some cases, these changes can also be applied to existing employees.... The Government Finance Officers Association (GFOA) recommends that jurisdictions considering new benefit tiers examine the following issues: ...

Governance and Administration of Other Postemployment Benefit Plans

"The Government Finance Officers Association ... recommends that sponsoring entities provide a clear, well-documented governance structure to guide governing bodies and plan administrators, as a good governance structure establishes the framework for effective plan administration."

Governance of Public Employee Post-Retirement Benefits Systems (PDF)

Excerpt: The Government Finance Officers Association (GFOA) recommends that the state or local government or other designated governing entity establish rules of governance for its post-retirement benefit systems that define the key elements necessary for trustees and other fiduciaries to fulfill their responsibilities, in accordance with fiduciary standards.

Sustainable Funding Practices of Defined Benefit Pension Plans, 2009 (PDF)

3 pages. Excerpt: Recommendation. The Government Finance Officers Association (GFOA) recommends that state and local government officials ensure that the costs of the benefits promised in public employee DB plans are properly measured and reported, in accordance with generally accepted accounting principles (GAAP)1. The GFOA believes sustainability requires that governments that sponsor or participate in a defined benefit pension plan contribute the full amount of their actuarially determined annual required contribution (ARC) each year. Failing to fund the ARC during recessionary periods impairs investment returns by depriving the fund of its opportunity to invest when stock prices are low. Long-term investment performance will suffer and ultimately require higher contributions.

GFOA Best Practice: Developing a Process for Complying with the ACA (2011, 2014) (PDF)

"The Government Finance Officers Association (GFOA) recommends that state and local government employers that sponsor group health plans implement a process for reviewing federal health-care benefit requirements at least quarterly ... [and] should consider the following issues: [1] Staffing levels and expertise ... [2] Communicating with employees... [3] Maintaining grandfathered status .... [4] Complying with the requirements .... [5] Segregating retiree health-care plans .... [6] Examining coverage options .... [7] Preparing for fees and taxes .... [8] Special compliance considerations for self-insured plans.... [9] Preparing for potential penalties .... [10] Using state exchanges."

Best Practices of Governmental Employers in Procuring Actuarial Services, 2012 Edition

"The Government Finance Officers Association ... recommends that state and local governments take the following steps to obtain high-quality actuarial services for their public retirement plans: 1) identify the actuarial services required; 2) establish selection criteria; 3) develop a clear and concise request for proposals (RFP); 4) determine, to the degree possible, the level of independence and objectivity of the actuary; 5) establish procedures for working with the actuary; and 6) periodically review and rebid actuarial contracts."

Establishing and Administering an OPEB Trust

The Government Finance Officers Association (GFOA) recommends creating a qualified trust fund to prefund OPEB obligations. To ensure that the trust is established and administered properly, governments should consult qualified legal counsel and fully understand the following issues[.]