Why is GASB 45 important to public agencies?
Many public agencies that have completed actuarial valuations have learned that retiree healthcare costs represent a huge financial burden and may not be sustainable in the future. In the early 1990s, private companies were required to comply with similar financial accounting standards that are applicable to the private sector. Due to inaction, some of these companies and the labor unions are now faced with tremendous legacy costs that may lead to financial insolvency.
