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GASB 68: How Governments and School Districts Report the Net Pension Liability
Last updated: October 12, 2026 · Independent guide · We do not sell rankings or coverage.
GASB 68 requires every state and local government that provides defined benefit pensions through a trust to report its share of the plan’s unfunded obligation as a net pension liability on the government-wide statement of net position, along with related deferred outflows, deferred inflows and pension expense. If your school district, city or special district participates in a state cost-sharing plan such as CalPERS or the Teacher Retirement System of Texas (TRS), you do not calculate these amounts yourself. You take them from the plan’s audited allocation schedule, book them as full-accrual adjustments outside your modified-accrual fund ledger, and disclose them in the notes and required supplementary information.
GASB 68 in brief (checked October 12, 2026)
- Who it applies to: state and local government employers, including school districts, cities and special districts, that provide defined benefit pensions through a trust. Cost-sharing employers report a proportionate share of the plan’s collective amounts.
- Requirement: recognize that share of the net pension liability, deferred outflows and inflows and pension expense in the government-wide and full-accrual fund statements.
- Key dates: GASB issued Statement No. 68 in June 2012, effective for fiscal years beginning after June 15, 2014. Statement No. 71 (November 2013) added a transition rule for contributions made after the measurement date. The measurement date can be no earlier than the end of your prior fiscal year.
- Official source: GASB Statement No. 68 (full text, as hosted by the Teachers’ Retirement System of Kentucky) and the North Carolina Office of the State Controller summary of Statement No. 71.
What GASB 68 requires in detail
Net pension liability and proportionate share
The net pension liability is the plan’s total pension liability minus its fiduciary net position. A cost-sharing employer first determines its proportion, which paragraph 48 says should be consistent with how contributions to the plan are determined, and then multiplies the collective net pension liability by that proportion (GASB Statement No. 68, June 2012). TRS of Texas, for example, states that its allocation schedule “provides the contribution amounts on which the proportions are based” (TRS, Instructions for Using the 2026 GASB 68 Schedules, no date shown).
Measurement date versus reporting date
Paragraphs 20 and 48 require the net pension liability to be measured as of a date no earlier than the end of the employer’s prior fiscal year. Many cost-sharing employers therefore report one year behind the plan. CalPERS announced its schools schedules for the June 30, 2025 measurement date on February 9, 2026 (CalPERS Circular Letter 200-007-26, February 9, 2026), so a California district closing June 30, 2026 uses those figures. TRS of Texas labels its schedules for the measurement year ended August 31, 2025 as fiscal year 2026 schedules, and its example applies them to a fiscal year ending August 31, 2026 (TRS GASB 68 FY2026 T-accounts example, no date shown).
Deferred outflows, deferred inflows and pension expense
Some changes in the liability go straight to pension expense. Others are deferred and amortized, as shown below.
| Item | Recognition period | GASB 68 paragraph |
|---|---|---|
| Differences between expected and actual experience; changes of assumptions | Closed period equal to the average expected remaining service lives of all employees in the plan | 33a |
| Difference between projected and actual investment earnings | Closed five-year period | 33b |
| Changes in your proportion; differences between your contributions and your proportionate share of contributions | Average expected remaining service lives | 54, 55 |
| Your contributions made after the measurement date and before your year-end | Deferred outflow; later recognized as a reduction of the net pension liability | 57 |
Statement No. 71 dealt only with the year of adoption. It required a beginning deferred outflow for contributions made after the beginning measurement date, so restated net position was not understated (NC Office of the State Controller, January 15, 2014). Paragraph 57 of Statement No. 68 carries the same treatment forward every year.
Notes and required supplementary information
Paragraph 78(g) requires your proportionate share of the liability recalculated at discount rates one percentage point higher and lower. Paragraph 81 requires two 10-year RSI schedules for each cost-sharing plan. The first shows your proportion, your share of the net pension liability, covered payroll, that share as a percentage of payroll and the plan’s funded ratio. The second compares required contributions with contributions recognized. Paragraph 82 adds notes on benefit or assumption changes.
Where the amounts go: government-wide versus governmental funds
Under paragraph 73, a governmental fund reports the net pension liability only to the extent it is normally expected to be liquidated with expendable available financial resources, and pension expenditures equal the amounts paid to the plan plus the change in that small fund-level liability. For most districts, the fund statements therefore show only the employer contributions you remitted. Michigan’s retirement office puts it plainly (Michigan Office of Retirement Services GASB FAQ, no date shown): the GASB 68 amounts are reported in the government-wide statements and in any full-accrual funds that carry payroll costs, and “they are not reported in your modified accrual fund-level statements.”
That is why the entries below belong in a conversion layer rather than in your general fund. Any proprietary fund with payroll also carries its share on the full-accrual basis.
Booking the plan’s allocation schedule
TRS of Texas publishes a numbered entry set keyed to the columns of its Schedule of Pension Amounts by Employer, which the Texas State Auditor’s Office audits (TRS journal entry instructions, no date shown; TRS 2026 schedule instructions, no date shown). The logic works for any cost-sharing plan, including CalPERS, which also offers cost-sharing employers help calculating their entries by email (CalPERS GASB page, February 6, 2026).
| Step | Debit | Credit | Source of amount |
|---|---|---|---|
| 1. Reverse last year’s post-measurement-date contributions | Contribution expense | Deferred outflows | Prior-year entry |
| 2. Reverse last year’s plan-related deferrals | Deferred inflows; pension expense | Pension expense; deferred outflows | Prior-year balances |
| 3. Record this year’s post-measurement-date contributions | Deferred outflows | Contribution expense | Your payroll and remittance records |
| 4–5. Apply contributions made during the measurement period | Net pension liability | Contribution expense | TRS columns 4 and 5 |
| 6. Proportionate share of collective pension expense | Pension expense | Net pension liability | TRS columns 6 to 10 |
| 7–10. New deferred outflows | Deferred outflows | Pension expense | TRS columns 12 to 15 (total ties to 16) |
| 11–14. New deferred inflows | Pension expense | Deferred inflows | TRS columns 17 to 20 (total ties to 21) |
| 15. State on-behalf contributions (special funding) | Grant expense | Grant revenue | TRS on-behalf allocation schedule |
After posting, your ending liability should agree to TRS column 11 and pension expense to column 24, give or take rounding. The credits to contribution expense remove contributions your funds already recorded as expenditures.
Illustrative example
The following figures are an illustration, not taken from any plan. A district closing June 30, 2026 carried a net pension liability of $10,000,000, plan-related deferred outflows of $2,000,000, deferred inflows of $900,000 and a $900,000 deferred outflow for contributions made after the prior measurement date. This year’s schedule shows $900,000 of contributions during the measurement period, a $1,650,000 share of collective pension expense, new deferred outflows of $2,400,000 and new deferred inflows of $700,000. The district paid $920,000 after the new measurement date.
| Account | Debit | Credit | Note |
|---|---|---|---|
| Contribution expense / Deferred outflows | $900,000 | $900,000 | Step 1 |
| Deferred inflows / Pension expense | $900,000 | $900,000 | Step 2, inflows |
| Pension expense / Deferred outflows | $2,000,000 | $2,000,000 | Step 2, outflows |
| Deferred outflows / Contribution expense | $920,000 | $920,000 | Step 3 |
| Net pension liability / Contribution expense | $900,000 | $900,000 | Steps 4–5 |
| Pension expense / Net pension liability | $1,650,000 | $1,650,000 | Step 6 |
| Deferred outflows / Pension expense | $2,400,000 | $2,400,000 | Steps 7–10 |
| Pension expense / Deferred inflows | $700,000 | $700,000 | Steps 11–14 |
The results are a net pension liability of $10,750,000, deferred outflows of $3,320,000 ($2,400,000 plan-related plus $920,000 of contributions), deferred inflows of $700,000 and pension expense of $1,050,000. The net credit to contribution expense is $920,000, which exactly offsets the $920,000 of contributions the funds recorded as expenditures this year.
Who is exempt or follows different steps
Employers in a single-employer or agent multiple-employer plan measure their own net pension liability rather than a proportionate share, and retiree health benefits fall under a separate OPEB standard. The distinction matters in California: CalPERS treats non-pooled public agency plans as agent plans, with accounting valuation reports ordered through myCalPERS at $2,250 per plan, while pooled public agencies and schools are cost-sharing employers. CalPERS lists a fee of $350 per rate plan per year for pooled agencies and $350 per district for schools, with each county office of education receiving one invoice for all of its districts (CalPERS GASB page, February 6, 2026).
When the state pays part of the contribution on your behalf, as Texas does for TRS employers, you recognize additional pension expense and matching revenue for the state’s share (paragraphs 94 and 95), which TRS has employers book as grant expense and grant revenue.
Deadlines and consequences
GASB standards carry no fines. Your deadline is your own audit timetable, and the practical constraint is the plan’s release date. CalPERS says its external auditor opines on the school allocation schedules and encourages employers to discuss GASB 68 audit requirements with their auditors. Entries that do not tie to the schedule lead to audit adjustments or a delayed report rather than a penalty.
Records you should keep
- The plan’s audited allocation schedule, collective pension amounts schedule and auditor’s report for each measurement date.
- Remittance detail reconciled to the contributions the plan reports for you.
- Prior-year closing balances by deferral category, because step 1 and step 2 reverse them.
- Ten years of RSI history, since paragraph 82 says prior-year amounts are not restated.
What to set up in your systems
The general rule is to keep the fund ledger on the modified-accrual basis and hold GASB 68 balances in a separate full-accrual layer. Districts do this in one of three places: a dedicated conversion fund or ledger in the ERP, a state-supplied conversion workbook, or an annual report tool. California’s SACS2012ALL reporting software, for example, included a Conversion Entries workbook that fed a fund consolidation worksheet and was meant to be prepared only after the funds were closed (Kern County Superintendent of Schools, no date shown).
Tyler Munis. Tyler’s financial management page describes public-sector multi-fund accounting but does not describe GASB 68 or government-wide conversion. Tyler sells a separate ACFR Statement Builder that it says is “embedded with” GASB rules, with no published pricing. If you post the entries in Munis, use a fund reserved for government-wide adjustments so operating budget reports stay clean.
Skyward. Skyward’s fiscal management page stresses a real-time general ledger and built-in state reports but publishes nothing on GASB 68 entries. Ask Skyward or your state user group whether your state chart of accounts provides a conversion fund.
Frontline ERP and Infinite Visions. Frontline’s California ERP page describes a SACS-compliant general ledger, and Tyler Technologies markets “School ERP Pro, powered by Infinite Visions” (Tyler School ERP Pro page, no date shown). Neither public page addresses GASB 68, so California users of either can hold the entries in the SACS conversion workbook.
Sage Intacct. Sage Intacct documents GAAP adjustment journals that it treats as separate reporting books, which you can report alone or combined with the accrual book. Setup starts at General Ledger > Setup > Configuration > Accounting settings > GAAP and Tax, and Sage recommends keeping adjustments separate from accrual or cash (Sage Intacct Help, October 8, 2026). That structure fits GASB 68 well, because the fund-basis books stay untouched. Our Sage Intacct review covers modules and pricing in more detail. For the wider close process, see our guide to ERP for financial close, and for capital programs funded by bonds, our article on construction accounting for public works projects.
How we researched this
We read the text of GASB Statement No. 68, North Carolina’s summaries of Statements No. 68 and No. 71, current CalPERS and TRS of Texas employer materials and the Michigan and New Mexico employer pages. We then checked public documentation from Tyler Technologies, Skyward, Frontline Education and Sage Intacct, and we say where a vendor publishes nothing on GASB 68. All sources were checked on October 12, 2026.
Related guides
- GASB 34 Reporting: Requirements and 2026 Changes
- ACFR: Sections, Timeline and How to Produce It
- GASB 75 OPEB Reporting for Governments and Schools
Frequently asked questions
Does the net pension liability go in the general fund?
Usually not. Paragraph 73 limits the governmental fund liability to amounts normally expected to be paid from available financial resources, which for most districts is little or nothing. The full proportionate share appears on the government-wide statement of net position and in any proprietary funds that carry payroll.
Why are my GASB 68 numbers a year old?
GASB 68 allows a measurement date as early as the end of your prior fiscal year. Plans such as CalPERS and TRS of Texas measure at their own year-end and publish schedules months later, so your June 30, 2026 statements use the plan’s 2025 measurement.
What is the difference between GASB 68 and GASB 71?
Statement No. 68 sets the full accounting and reporting rules for employer pensions. Statement No. 71 was a narrow amendment issued in November 2013 that fixed the transition treatment of contributions made after the measurement date in the year of adoption.
Do I need to reverse last year’s GASB 68 entries?
Under the TRS of Texas method, yes. You reverse the prior-year deferrals, including post-measurement-date contributions, then record the new balances from the current schedule. Other plans may use roll-forward entries, so follow your plan’s instructions.
Can my ERP calculate GASB 68 for me?
No ERP we reviewed calculates the proportionate share, because the plan’s actuary produces it. Your system’s job is to hold the entries in a full-accrual layer, keep them out of fund budgets and carry the RSI history forward.
Sources
- Governmental Accounting Standards Board, Statement No. 68, Accounting and Financial Reporting for Pensions, June 2012 (copy hosted by the Teachers’ Retirement System of Kentucky, no date shown on the page).
- North Carolina Office of the State Controller, Focus Area: Pension Transition for Contributions Made Subsequent to the Measurement Date (GASB 71), January 15, 2014.
- North Carolina Office of the State Controller, Focus Area: Accounting and Financial Reporting for Pensions (GASB 68), updated August 16, 2018.
- CalPERS, Circular Letter 200-007-26: GASB 68 Cost-Sharing Reports for Measurement Date June 30, 2025, February 9, 2026.
- CalPERS, Governmental Accounting Standards Board (GASB) employer resources, February 6, 2026.
- Teacher Retirement System of Texas, Instructions for Using the 2026 GASB 68 Schedules, no date shown.
- Teacher Retirement System of Texas, GASB 68 journal entry instructions (measurement year ended August 31, 2023), no date shown.
- Teacher Retirement System of Texas, GASB 68 FY2026 T-accounts example, no date shown.
- Michigan Office of Retirement Services, Governmental Accounting Standards Board FAQ, no date shown.
- New Mexico Educational Retirement Board, GASB Information for employers, no date shown.
- Kern County Superintendent of Schools, GASB 34 Conversion Entries (SACS2012ALL), no date shown.
- Sage Intacct (vendor), Set up for GAAP or tax adjustments, October 8, 2026.
- Tyler Technologies (vendor), Financial Management, no date shown; ACFR Statement Builder, no date shown.
- Skyward (vendor), Fiscal Management, no date shown.
- Frontline Education (vendor), California ERP Finance, no date shown.
- Tyler Technologies (vendor), School ERP Pro, powered by Infinite Visions, no date shown.
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
