GFOA Responds to Proposed Revisions to Pension Cost Principles

On December 4, GFOA signed a letter along with 15 other national organizations in response to the proposed revisions to pension cost principles of the Office of Management and Budget (OMB) guidelines for Grants and Agreements. OMB’s objectives for the proposed revisions included incorporating statutory requirements and administration priorities, reducing agency and recipient burden, clarifying sections that recipients or agencies have interpreted in different ways, and rewriting applicable sections in plain language, improving flow, and addressing inconsistent use of terms. The letter notes that the proposed language around pension costs is inconsistent with OMB’s intent, as new language regarding unfunded pension costs is unclear and contradictory, and would lead to discretionary interpretations, inconsistent applications, and significant increases in costs and burdens. We recommended that the new subpart be removed or modified to be clear and consistent with other parts of OMB’s pension cost principles that allow for the payment of actuarially determined contributions recognized by Generally Accepted Accounting Principles (GAAP).