• Who is “Gadsby” and why is he messing with my retiree health care benefits?
    Updated On: Jan 15, 2017

     

    Who is “Gadsby” and why is he messing with my retiree health care benefits?

    “Gadsby” or “GASB” is an acronym for the Governmental Accounting Standards Board. GASB publishes rules that provide governments with accounting standards to use when completing their financial statements. The financial statements are called Comprehensive Annual Financial Report and are used for a number of things. In 2006 or 2007 (depending on community size) GASB started requiring local units of government to include statement 45. GASB 45 is a statement that looks at the liability that the local unit has for other post employment benefits (OPEB), most commonly, retiree healthcare.

    A bit of comparison is in order. Most locals have a Defined Benefit Pension plan. The state constitution requires that local units of government fund the cost of pensions in the year that they are accrued. For example, an actuary calculates how much the contribution rate is for pension contribution and that payment is made to the pension plan in the year that you work. Through investment earnings and regular contributions, that annual contribution (normally made on a per paycheck basis) grows and when you retire the money is there to pay the benefit you have earned. This is called pre-funding. OPEB benefits do not have the same pre-funding requirement that pension benefits do, so most communities fund them on a “pay as you go” basis. That means they are not saving today for future payments, there is no investment income, and the full cost of OPEB is paid on a regular monthly basis. Some communities have started pre-funding their OPEB, and in some cases have made significant funding progress. This is reported on a percentage basis just like pension plans, some have done some prefunding and some have done other things; some communities have 100% funded OPEB plans. Most do not.

    Here is where the problem comes in. GASB requires a community to account for the unfunded accrued liability that they have for OPEB benefits and report it. In many places this is a significant number and has led many communities to find ways to reduce that liability. With the tax limitations imposed by the state constitution, the significant cuts in state revenue sharing, and the housing market crash in 2008, most communities have much less revenue to operate today. This had brought us to where we are today. Many locals have had, through negotiated settlements or forced contract concessions, reduced or eliminated the retiree health care benefit in favor of some other plan (such as a monthly stipend into a health care savings account). This is partially why we see the action occurring at the state level such as the recent 80/20 retiree plan that we defeated this month. Likely the next two years will see the resurfacing of the state legislature trying to “fix” the OPEB liability “problem” instead of letting each community deal with it, as most are currently doing.  


  • Contact Information for Local Union Executive Board Members

    You can access the most accurate contact information for local union officers from the IAFF website by clicking on this link.  After you log-in, click on Dashboard, then Officer Resources and then Affiliate Directory.. You can search by local name, local number, by state, or by the officers name if you know it.  This data is updated daily.

    Find Your Elected Officials

    Upcoming Events
    MPFFU Executive Board Meeting
    Mar 15, 2018
    Lansing Radisson Hotel
    MPFFU Committee Meetings
    Mar 16, 2018
    Lansing Radisson Hotel
    2nd District Meeting
    Mar 19, 2018
    Park Place Hotel, Traverse City
    5th District Meeting
    Mar 20, 2018
    Cascades Manor Jackson, MI
    6th District Meeting
    Mar 21, 2018
    River Crest Rochester Hills,MI
    4th District Meeting
    Mar 22, 2018
    Grecian Center Southgate, MI
    3rd District Meeting
    Mar 23, 2018
    Location to be finalized Saginaw, MI
    MPFFU 53rd Biennial Convention
    May 08, 2018
    Bay City DoubleTree Hotel

    Fire Pac

    Join MPFFU FIRE PAC Now - Sign-up online by clicking here.

    Click here for manual auto-deduction form

    IAFF Center of Excellence for Behavioral Health Treatment and Recovery
    The first recovery center designed specifically for IAFF members

    Michigan Crisis Response Association-1-800-969-0025

    Welcome to MIOSHA!
    click here
  • MPFFU

    Copyright © 2018.
    All Rights Reserved.

    Powered By UnionActive



  • Top of Page image