Test Your GASB 43 and 45 I.Q. QUESTION: When Does GASB 43 AND 45 become for effective for my organization? ANSWER: The answer depends on the size of your organization. § If your revenues exceed $100 million, you will most likely have to implement GASB 43 AND 45 for fiscal years beginning in 2007; § If your revenues are between $10 and $100 million, you will most likely have to implement GASB 43 AND 45 for years beginning in 2008; § If your revenues are below $10 million, GASB 43 AND 45 would be implemented in years beginning in 2009. QUESTION: Why would I choose early implementation? liability? ANSWER: GASB 43 AND 45 costs are already inherent in your costs of operations and future obligations. You are just not required to determine the amount. You may want to adopt early implementation under the following circumstances: § Your organization is negotiating union contracts – Understanding the impact of GASB 43 AND 45 is critical to arriving at a fair and accurate agreement; § Your organization is entering into a large capital project – Bank and lending institutions are aware that GASB 43 AND 45 implementation is only a year or two away. They may require you organization to establish its liability prior to making commitments to fund additional obligations. QUESTION: What benefits will I be required to include in my GASB 43 AND 45 calculation? ANSWER: Benefits that will be paid at retirement other than pension. This could include: § Health Insurance; § Life Insurance; § Dental Insurance; § Sick-Pay.	QUESTION:  What does OPEB mean? ANSWER:  Other Post Employment Benefits. QUESTION:  Will my organization be required to fund its GASB 43 AND 45  liability? ANSWER:  Your actuarial consulting firm should provide you with cost projections illustrating a dramatically increasing cost over time if the liability remains unfunded.  It is likely, that you will make an informed decision to fund this liability. QUESTION:  How can I prepare for GASB 43 AND 45 ? ANSWER:  There are several steps you should take prior to implementing GASB 43 AND 45 : §         Understand the benefits offered to your retirees; §         Gather union contracts and plan descriptions; §         Assess the quality of the data contained in your human resource software.  All active employees, former employees and retirees that are entitled to benefits should be in your database. QUESTION:  How long does the GASB 43 AND 45  process take to complete? ANSWER:  This will depend on the quality of the data that you have for your actuarial consultant and the amount of upfront planning that your organization dedicates to this task.  A typical engagement can span 6 to 8 weeks; once your organization has provided a clean demographic profile to it consultants. QUESTION: How frequently will my organization need to conduct this valuation? ANSWER: GASB 43 AND 45 requires a complete actuarial study and evaluation every two years and a roll-forward valuation in the off years. The frequency could increase if there are significant changes to benefit plans or a change in the number of individuals covered. QUESTION:  Does my organization need to hire a special firm to assist with this process? ANSWER:  Your organization should engage a firm that specializes in valuing OPEB.  Your interests will be best served if this firm understands the intricacies of your organization and has specialized skills in your particular sector.