150 West State Street. Trenton NJ 08608 -- 609-989-1100 office

Association Staff

Barbara Berreski, JD, MS

Chief Executive Officer

Director, Government & Legal Affairs



Patricia S. Berry

Chief Operating Officer


Pamela J. Hersh

Communications & Public Affairs


Support Staff

Charlene R. Pipher

Executive Assistant/Web Design


Terry Toth

Part-Time Secretarial Assistant


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New Jersey Association of State Colleges and Universities

150 West State Street

Trenton, New Jersey 08608

609-989-1100 office

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GASB Statements and Impact on Public Higher Education Institutions


New Jersey should recognize, in statute, its obligation to fund pension benefits and other postemployment benefits (OPEB) for employees at the public colleges and universities – and accept financial liability for providing those benefits.  Recent amendments to the standards of the Governmental Accounting Standards Board (GASB) create confusion over whether the liability for these benefits rests with the institutions of higher education or the state.


  • Definition:  Established in 1984, the Governmental Accounting Standards Board (GASB) is the independent, private-sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles.
  • Mission:  The GASB standards are recognized as authoritative by state and local governments, state Boards of Accountancy, and the American Institute of CPAs (AICPA).  GASB develops and issues accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to taxpayers, public officials, investors, and others who use financial reports.
  • GASB Statements GASB issues statements that are numbered and have applicability to state colleges and universities, which are instrumentalities of state government.
    • GASB Statement No. 68 “Accounting and Financial Reporting for Pensions” became effective for fiscal years beginning after June 15, 2014 and requires public higher education employers with special funding situations to report their proportionate share of net pension liability and related expense in their financial statements.
    • GASB Statement No. 75 “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions” is effective for fiscal years beginning after June 15, 2017 and requires public higher education employers to report a liability and related expense in their financial statements for other postemployment benefits (OPEB) if a special funding situation exists. The technical application of “special funding situation” may be different for GASB Statement No. 75 than it is for GASB Statement No. 68.

The Concern:  Liability and Credit Worthiness

  • Pension liability and pension expense are determined annually for the total State Pension Fund based on actuarially-determined factors and prescribed formulas. GASB No. 68 requires the schools to report their proportionate share of the pension liability and pension expense.
  • The actual funding of the State Pension Fund is determined each year by the State Legislature, and the funding is paid by the state (including funding for the schools’ future pension liabilities).  The payment of retiree pension benefits is made from the State Pension Fund as retirees become eligible.
  • The technical interpretation of GASB No. 68 resulted in schools having to report their proportionate share of liability and expense, even though the state indicated that there is no intention to transfer to the schools the responsibility for funding of the State Pension Fund or the payment of retiree pension benefits. The schools are concerned that this could change.
  • The state’s OPEB plan, which pays for retiree health care, is administered and paid for entirely by the state. The schools do not maintain plan or participant data. Health benefits and rates are negotiated by the state without involvement by the schools.
  • Statement No. 75 requires employers to report their proportionate share of future expected plan payments (liability) and current year expense on the face of the financial statements for the state’s OPEB plan that they provide, if a special funding situation exists. It is the opinion of NJASCU, however, that since the state by statute is required to fund retiree health benefits, the schools will not need to record the liability, and there will/should be an allocation of revenue to match the calculated expense. We have no official guidance on this yet.
  • As of December 31, 2018, the state’s OPEB plan is still under audit and a final determination by the state’s auditors of “special funding situation” has not been made.
  • Institutions are component units of the state and once consolidated, the liability remains reflected on the state’s financials. The implementation of GASB No. 68 had no effect on the state’s reported numbers, however, the unfunded liability and pension expense allocated by the state to the institutions was significant. The impact of GASB No. 75 could potentially be even more material.
  • The unfunded liability negatively affects all institutions (e.g., downward pressure on credit rating, financial statements because of the need to record expense, reduces total net position, possibly need to record as liability, etc.).
  • Stakeholders (students, parents, taxpayers, etc.) would have difficulty interpreting institution’s financials reflecting negative net assets.
  • It will be important to know how the credit-rating agencies intend to factor GASB No. 75 into the credit ratings of New Jersey’s senior public colleges and universities.
  • The delay in finalizing applicability of GASB No. 75 for the schools already has impaired the school’s ability to meet debt compliance deadlines.

The NJASCU Statement: The state colleges and universities contend that they should not be forced to report the liability for OPEB, because the State of New Jersey, not the state colleges and universities, is statutorily required to pay for the health benefits of retired employees.  The state colleges and universities also would like to revisit GASB No. 68 to ensure that fiscal liability for pensions remains with the state. 


February 7, 2019

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