GASB 43 and 45 require government employers to recognize benefits during an employee’s period of employment. The difference between the accrual cost of the retiree benefits within the given year and amount paid out during the year (in the form of benefit payments, insurance premiums, or payments to a trust) is known as the net OPEB obligation, or balance sheet liability.


• Reaction of credit-rating agencies
• Credit-rating agencies are most concerned with an employer’s ability to manage OPEB costs and liabilities. On the one hand, the creation of an OPEB trust could be a positive sign to the rating agencies that you are actively seeking ways to manage costs associated with your OPEB obligation. On the other hand, an unfunded trust might signal to the rating agency an inability to follow through on funding and do little to demonstrate effective cost-management of retiree benefits.