Completing the Net Pension

Liability Worksheet

for FY2017

Training presented by:Local Government Services Bureau

State Financial Services DivisionMT Department of Administration

Steps to complete the NPL/GASB68 Worksheet• Step 1: Download necessary reports & worksheets

• NPL - GASB 68 Worksheet from LGSB website • Review the revised instructions

• Employer reports from MPERA and/or TRS• Step 2: Complete the Deferred Schedules Tab for the current and

prior years for each applicable plan • Step 3: Complete the applicable Pension Plan Sample JV Input tab of

the GASB 68 Worksheet• Step 4: Complete the Payroll Allocation Page• Step 5: Complete the Prior Year’s Balances on Recap Tab • Step 6: Governmental Fund Adjustments (Fund 9500 if applicable)• Step 7: Proprietary Fund Adjustments (Each Proprietary Fund)• Step 8: Complete the RSI & RSI notes provided within the Bureau’s

Annual Financial Report• Optional: Complete & Move the Note Disclosures to the AFR

NPL-GASB 68 Worksheet ~

Step 1:• The worksheet is on

the LGSB website:http://sfsd.mt.gov/LGSB

• Accounting and Annual Financial Report Resources

• Open the Excel Spreadsheet

• Rename the file• Save the file to your

computer

NPL Worksheet Instructions Tab:

Review the steps of the instructions page (or tab) of the NPL Workbook

MPERA Website:

MPERA reports necessary to complete the form can be found on their website:http://mpera.mt.gov/EMPLOYERS

• Click on Updated GASB Information found in the Employers Box

The MPERA Website:• Information is

available for multiple years

• Click on the “ER Specific Data” link for the fiscal year you are completing

• Select your local government information by scrolling until you find your local government

MPERA Employer Reports by PlanDownload the pension plan reports necessary to complete the worksheet

MPERA reports include:PERSFURSMPORSSRS

Step 2: Input the Deferred Schedules Tab Prior Year & Current Year Deferred Outflows and Inflows of Resources:

Prior Year: Transfer information from the prior year’s GASB68 Worksheet or prior year’s MPERA report to complete the prior year deferred outflows and inflows in the yellow-shaded cells.Current Year: Transfer the information from the current year’s MPERA Note Disclosure Schedule titled Recognition of Deferred Inflows & Outflows

Prior Yr. Current Yr.

MPERA Note Disclosure:Example of Worksheet – Deferred Input Tab:

Step 3: The Sample Journal Entries:

Using MPERA’s PERS Plan Report locate the Sample Journal Entries page

Input in yellow cells

Salmon cells are formulas

Step 3: Sample JV Input Tab ~ Prior Year’s Contributions Subsequent to the Measurement Date

You will not enter the Deferred Outflows of Resources – Employer Contributions Subsequent to the Measurement Date for the Prior Year from the MPERA Sample Journal Entries

The correct adjusted amount will auto-fill from the Deferred Schedules Tab; If it is different than MPERA’s amount – an adjustment will be auto-calculated and made to pension expense

Step 3: Sample JV Tab ~ On-Behalf Revenue:Input the Sample JV Tab using the MPERA report

Locate the PERS Grant Revenue from the Coal Taxin PERS Note Disclosure -Schedule 80g, 80j

Input the coal grant revenue in the Sample Journal Entries – Part #2

Step 3: Sample JV Tab – Current Year Contributions Subsequent to the Measurement Date:

Use the MPERA ERIC System to determine the Current Fiscal Year’s Contributions Subsequent to the Measurement Date

Input the Defined Benefit Contributions into Sample JV Tab - Section #3

Example of MPERA ERIC Report:

Other Plans:Repeat Steps #2 and #3: Input the information for other applicable MPERA pension plans

MPERA Employer Specific Reports:• PERS• FURS• MPORS• SRS

The TRS report is separate from MPERA

Teachers Retirement System – TRS:

Teachers Retirement System (TRS) information is located:

https://trs.mt.gov/

Click on the link for GASB 68 Employer Reports

Find your local government on the drop-down menu

TRS Information for NPL-GASB 68 Report• Input the information from the Sample Journal Entries page of the

report provided by TRS

TRS Input:The Teacher Retirement Worksheet entry page is different than the MPERA pension plan input pages

Reason: Journal Voucher Format of the information provided by TRS differs from MPERA

Step 4: Allocation by Fund TypePayroll Allocation for PERS & Other Pension Plans

• The Payroll Allocation should be consistent with the Funds and Major Functions (account type) the participating employees’ salary and deductions are paid from

• The payroll report used for the allocation should be the gross wages of employees that participate in the PERS plan only(or the PERS contributions can be used)

Run a gross payroll or contribution history

report by fund type for only employees

participating in PERS

Allocation for PERS & Other Pension Plans cont.

1a) Input the amount of payroll or contributions for governmental funds as one total in the yellow cell

1b) Input the amount for each proprietary fund individually in the yellow cells

Allocation for PERS by Major Purpose:

Payroll Allocation for Governmental Funds:

2) Further allocate the payroll by Major Purpose (account type)

75,000

75,000

Total of all Governmental Funds

Report the Gov. Funds Total by Major Purpose

Payroll Allocation for Pension Plans other than PERS

Payroll Allocation of Pension Plans other than PERS for Governmental Funds :3) Enter the percentages for pension plans other than PERS

• For FURS, MPORS & SRS - The default will be 100% to Public Safety;

• TRS default is 100% General Government• Update to reflect your actual payroll allocation if different

Example below shows SRS manually changed to reflect 90% Public Safety & 10% General Government

SRS

Step 5: The Recap Tab

Input the Prior Fiscal Year’s Ending Balances for the total of the Governmental Funds and individually for each Proprietary Fund for:

Net Pension Liability

Deferred Outflows of Resources

Deferred Inflows of Resources

Step 5: The Recap Tab cont.

The information from the Payroll Allocation will be used to calculate the adjustments by fund type and plan type on the Recap Tab

The Recap Page contains:

Prior Year Ending Balances

Current Year Ending Balances Required Year-end Adjustments

Step 6: NPL Worksheet ~ Governmental Funds Adjustments: #1 - #3:

#2 – BS Conversion

#3 - OP Conversion

#1 – GLTDAG

Answer:

Governmental Funds’ Adjustments: Frequently asked question:

Do you keep Fund 9500 Up-to-date in your Accounting Software?

If yes, Enter Adjustment #1

If not, you will only adjust on your AFR

#1 - Fund 9500 & GLTDAG

Do I make the adjustments in my accounting software?

#3 – OP Conversion –Revenue Analysis

Net Pension Liability on the GLTDAG of AFR:

#1 – Use to complete the GLTDAG of AFR

Input the Change in Net Pension Liability and offset to Amount to be provided -other

Deferred Outflows & Inflows Adjustments on AFR –BS Conversion Worksheet :

Deferred Inflow balance is a debit balance

The resulting debit balance of Deferred Inflows of Resources will be input on the AFR as a negative amount.

Debit Credit

Deferred Outflows & Inflows Adjustments on AFR –BS Conversion Worksheet:

Input the prior year’s ending balance of Deferred Outflows & Inflows from prior AFR and current yearDeferred Outflow of Resources & Deferred Inflow of Resources in the AFR BS Conversion Page

#2 Input on the BS Conversion Sheet of the AFR

BS Conversion Page of AFR: Column D Column E

Debit Credit

Governmental Funds Adjustments #3 B and CDetail information for Pension Expense & On-Behalf Payment:

#3 C - OP Conversion –Pension Expense Breakdown

#3 B - Op Conversion (total) and Revenue Analysis (detail)

On-Behalf Revenue Adjustments #3 B on AFR:

#3 B - Transfer to OP Conversion

Insert #3 B in Column F under Intergovern-mental Revenues on the OP Conversion Page of AFR

OP Conversion of AFR:

Breakdown of Intergovernmental Revenue by Function:

Input the breakdown of On-behalf Rev. on the Revenue Analysis Page of AFR

Input the revenue by major purpose/function on the Revenue Analysis Page –under Program Revenues – State & Federal Shared Revenues Column

Revenue Analysis of AFR:

Governmental Funds Pension Expense:

Transfer Pension Expense to OP Conversion

Insert the Pension Expense by Function in Column F under Expenditures on the OP Conversion

OP Conversion of AFR:

Step 7: Proprietary Fund Adjustments

Proprietary Fund adjustments are calculated by the payroll allocation

The Proprietary Fund Adjustments will auto-calculate. They are located on the Proprietary Fund Journal Adjustment Tab (Lavender tab)

Proprietary Fund Adjustments – Step 7

The necessary journal voucher adjustments for each Proprietary Fund will populate.

Review the Deferred Outflow & Inflow balances

The journal adjustments will be input in the accounting software

Proprietary Fund Adjustments – Step 7

The Pension Expense Account Number

should be the same as used

for your payroll in the

fund.

Example #1:Water payroll:5210-430500

Pension expense Acct # 430500Object Code #195 - #199

5210-430500-195 – Pension Expense

Proprietary Fund Adjustments – Step 7

Proprietary Fund

Adjustments will be entered

in the Accounting Software

The entries will be made on the

Statement of Net Position and the

Statement of Revenues, Expenses and Changes in Fund

Net Position.

Proprietary Fund Cash Flow Statements:Adjustments will be

necessary on the Cash Flow Statements

The pension expense adjustments are non-

cash items – Adjust the Cash paid to employees

The On-Behalf Payment is also a non-cash item –decrease the Subsidies

from taxes & governments by the On-

behalf payment

Adjust using a line on the Reconciliation of

operating income to net cash provided that you

aren’t using

Annual Financial Report Note Disclosures

GASB 68 requires additional Note Disclosures

• The format and note disclosures are provided by MPERA and TRS in PDF format. They can be inserted into your annual financial report

Optional MPERA Plan Note Disclosures are included in the NPL GASB 68 Worksheet

• Follow the instructions in this presentation and in the Worksheet instructions to Copy & Move the optional note disclosures to your AFR

OR

Instructions to Copy & Move the Note Disclosures:

Moving the “Optional” Note Disclosures:Step 1: Right click with your mouse on the tab at the bottom of the worksheet of the pension plan you want to copy and move to the AFR

Step 2: Select the Move or Copy Sheet

Moving the Note Disclosures to your AFR:A Move or Copy Pop-up Menu will appear:

Step 3: Find your AFR name in the To book: menu

Step 4: Find the location in the AFR you want to place the pages(Note section 36-40)

Step 5: Check the Create a

Copy box

Click on the OK Box and the worksheet will be copied to your AFR

Pop-up Menu to Move and Copy:

Step 3

Step 4

Step 5

Final step

Step 8: Required Supplementary Information

The RSI Schedules & Notes to the RSI• Complete the RSI Schedules for each

applicable plan type. The can be located in the LGS Bureau’s Annual Financial Report

The 10-Year Schedules are:• Schedule of Proportionate Share of Net

Pension Liability• Schedule of Contributions10-year Schedules are not required in the first years of implementation until a full 10-year trend is compiled. Governments should present information for years which information is available

RSI and Notes to the RSI:

Schedule of Proportionate Share of Net

Pension Liability

Schedule of Contributions

Recap:• Local Governments will use the reports supplied by MPERA and TRS

• Net Pension Liability Worksheet will assist with adjustments and reporting requirements to comply with GASB 68

• Employer’s Statement of Net Position will include:• Net Pension Liability added for Pension Plans• Deferred Inflows of Resources• Deferred Outflows of Resources

• Additional Requirements: • Recognition of On-behalf Revenues paid directly to the Pension Plans• Pension Expense• Notes to the Financial Statements • Required Supplementary Information & Notes

Resources:• LGSB Website: http://sfsd.mt.gov/LGSB

• Net Pension Liability - GASB 68 Worksheet• Annual Financial Report

• GASB Website: www.gasb.org• GASB 68 Statements• GASB 68 Implementation Guide• GASB Q&A’s• GASB Toolkit

• MPERA Website: www.mpera.mt.gov• Employer Specific Data • MPERA CAFR

• TRS Website: www.trs.mt.gov• GASB 68 Reports

Local Government Services BureauContact Information:

Address: 125 N Roberts St, Room 270 ~ Mitchell BuildingPO Box 200547, Helena, MT 59620Website: http://sfsd.mt.gov/LGSB

Phone number: Helena Office: (406) 444-9101

Regional Accountants:

Magda Nelson406-257-5245MNelson@mt.gov

Tod Kasten406-974-3377TKasten@mt.gov

Darla Erickson406-371-5627DErickson@mt.gov

VACANT444-9101