This new liability measurement will result in a material impact on net position for most governmental entities. Governments who previously reported a net pension asset (because they contributed more than the ARC) may now report a significant liability and those who reported a net pension liability may now report a much larger liability.
What GASB68 calls for is determining a net pension liability by comparing liability values to assets with a lower interest rate applied to the liability calculation of the underfunding. It replaces GASB27 which basically made up a net pension obligation amount based on the differences in funding the ARC over the years. Everyone realized the duplicity of GASB27 except for those who desperately wanted to believe otherwise as the comment above illustrates unequivocally.
The first set of GASB68 reports just came out for the New Jersey plans without much fanfare (possibly because the state did not spoon-feed a number to the media and some arithmetic was involved) and after putting the pertinent data into a spreadsheet, the new number turns out to be:
Items to note:
1) Latest reported asset value is $74 billion
2) PFRS and PERS include both a state and local element but only one blended interest rate for each plan is used which develops lower liability amounts for the state portions in comparison to the local than if the state and local portions used separate rates (per instructions from Christie’s people?)