A government has a single-employer defined benefit pension plan for its firefighters. At its December 31, 2019 fiscal year-end, the government had a total pension liability for the plan of $1,200,000 and accumulated assets to pay the liability of $800,000. On December 31, 2020, the government had a total pension liability for the plan of $1,300,000 and accumulated assets to pay the liability of $780,000. The assets to pay the liability are reported as a part of the General Fund's committed fund balance. What amount will the government report as its pension liability in its government-wide financial statements on December 31, 2020?

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Quizplus · Accepted Answer

If a pension or OPEB plan has not established an irrevocable trust in which its assets are legally protected from the creditors and dedicated to providing pension or OPEB benefits to retirees, participating governments are required to report the total pension or OPEB liability in its government-wide financial statements. In this case, there are no assets to net against the liability. The total pension liability on December 31, 2020 ($1,300,000) will be reported in the government-wide financial statements.

A Government Has a Single-Employer Defined Benefit Pension Plan for Its