GASB 45
In 2004 GASB 45 was introduced. All governmental entities have been mandated to post the full retiree liability on their financial statements for all active and retired employees.
The benefits considered under GASB 45 include: Medical, dental, life, vision, long term care, etc.
Even if retirees pay the full cost of the coverage, a significant liability may still exist. The average liabilities are 3x- 10x the normal annual medical cost for the entity.
The bottom line is this:
Cities, counties, school districts will be forced to add big liabilities to the financial statements. Funding the liability will probably not be financially feasible, because of the cost. Not funding the liability will have a negative impact on the credit rating of the entity
