What is GASB 45?

GASB stands for the Governmental Accounting Standards Board.  They develop the accounting rules for public sector employers.

In 2004, GASB issued Statements No. 43 and 45 for Other Post-Employment Benefits (OPEB's). GASB 43 is for funded plans and GASB 45 is for public employers. These statements require governmental entities to recognize the cost of OPEB's when they are earned (while employees are working), rather than when they are paid (after employees retire).

OPEB's are post-employment benefits provided outside a pension plan.
They include:

• Retiree health coverage – which usually generates the biggest OPEB costs,
• Other retiree benefits like dental, vision and life insurance coverage, and
• Termination benefits that must be used for health coverage (such as payments to a health savings account) – but not those based on unused vacation or sick leave.

The "other" in OPEB means "other than pensions".  Most pension and severance benefits are covered under GASB 16, 27 or 47.