GASB 75 OPEB and GASB 101 compensated absences valuations

GASB 75 applies to state and local governmental employers that provide OPEB, and GASB 101 applies to the compensated absences of state and local governments. Typical entities are counties, cities, school districts, water and utility districts, community colleges and special districts that provide a retiree health subsidy or an implicit rate subsidy for retirees on the active health plan.

Two dates matter. GASB 75 took effect for fiscal years beginning after June 15, 2017, and GASB 101 for fiscal years beginning after December 15, 2023, with earlier application encouraged for GASB 101 (GASB 75; GASB 101). Reporting by an OPEB plan or trust itself falls under Statement 74 (Statement 75, paragraph 3); this page covers the employer's total OPEB liability and expense.

Signals you need the work:

• An auditor request for the OPEB valuation or the roll-forward
• A new fiscal year with an unrecorded leave liability under GASB 101
• A change in retiree benefit terms, a subsidy or a union agreement
• A change of actuary or of census system

A GASB 75 valuation runs on a two-year cycle: a full valuation in one year, a roll-forward in the next, then a new full valuation. The timeline diagram shows three fiscal years as an example, with the signing actuary's sign-off at each step.

The rule is in Statement 75 paragraph 28, repeated in paragraph 147 for OPEB not provided through a qualifying trust. The total OPEB liability should be determined by an actuarial valuation as of the measurement date or by update procedures that roll forward an earlier valuation performed no more than 30 months and 1 day before the employer's most recent fiscal year-end. If significant changes occur between the valuation date and the measurement date, professional judgment decides how much roll-forward work is needed and whether a new valuation is required. For accounting and financial reporting, an actuarial valuation of the total OPEB liability should be performed at least biennially, and more frequent valuations are encouraged (GASB 75, June 2015).

The measurement date may be no earlier than the end of the prior fiscal year and no later than the end of the current fiscal year, applied consistently (paragraph 27). A roll-forward is not a reuse of old numbers: it updates the discount rate to the new measurement date and brings in benefits paid, changes in the covered group and any benefit changes.

Most changes in the net OPEB liability hit OPEB expense in the period they occur, while three items are spread over later years and parked in deferred outflows and inflows. Statement 75 paragraphs 43 and 44 set the rule, and the table lists each item.

For benefit payments that plan assets are not projected to cover, the discount rate is a yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (paragraph 36; paragraph 155 uses that municipal bond rate alone when the OPEB is not provided through a qualifying trust). Deferred outflows and inflows are the part of these changes not yet in expense.

GASB 101 requires a liability for leave that has not been used when three conditions are all true: the leave is attributable to services already rendered, it accumulates, and it is more likely than not to be used for time off or otherwise paid or settled (GASB 101 paragraph 9). More likely than not means a likelihood of more than 50 percent.

To apply the third test, a government weighs its employment policies, whether earned leave will become eligible for use or payment, the historical record of use, payment or forfeiture, and anything known that would make history unrepresentative (paragraph 12).

Exceptions to the general rule:

• Leave likely to be converted to defined benefit postemployment benefits is left out of the compensated absences liability (paragraph 13)
• Parental, military and jury duty leave are recognized only when the leave commences, while sick leave and unrestricted sabbatical leave follow paragraph 9 (paragraph 14)
• Unlimited leave and holiday leave on a fixed date are recognized only when used (paragraph 15)

Leave is measured at the employee's pay rate at the date of the financial statements unless some of it will be paid at a different rate (paragraphs 16 and 17), and certain salary-related payments are added. An illustrative employee has a 120-hour balance, history says 90 hours will be used or paid, and the pay rate is $30: 90 x $30 = $2,700, before salary-related payments. The Board chose current pay rates over projected ones to avoid complex calculations that may need an actuary (Statement 101 summary, costs and benefits section).

GASB 75 measures a long-dated retiree promise with an actuarial valuation, while GASB 101 measures leave at current pay rates, which is why the first nearly always needs an actuary and the second usually does not. The table sets them side by side.

Sources: GASB 75 and GASB 101, both read on 2026-10-02. For GASB 101, the Board said it chose a current value measure instead of complex calculations that may need an actuary, so an actuary is not required, but the model still needs a documented estimate per leave type.

A government with fewer than 100 people, counting active and inactive employees, in the OPEB plan at the start of the measurement period may use the alternative measurement method instead of an actuarial valuation. That is paragraph 224 of Statement 75. The alternative method still has to be performed at least every two years, with roll-forward in between, and paragraph 225 lists the specific simplifications it allows.

Whether the threshold applies is a count of people, not of positions, so the census review comes first. A government near 100 participants should check the count at the beginning of each measurement period, because crossing the threshold changes the method. We prepare the count and the simplified calculation for the signing actuary or the finance team to review, and we flag the year the plan crosses the line.

Two dated public records show GASB 75 fees quoted at $1,500 to $2,000 for a roll-forward and $3,500 to $7,800 for a full valuation at two small governments, in letters from 2022 and 2024. Two documents we opened on 2026-10-02 give the figures, and neither is a Finbryn price.

Both fees rest on conditions: Canterbury's letter says its fees assume employee and retiree data arrive in the actuary's template and are complete and consistent, and that fees may be adjusted if collecting usable data takes significant time or the report needs revision because of inaccurate data. We did not check participant counts, so the figures are not comparable plan for plan, and the Ravalli letter is more than four years old. Canterbury's letter bills consulting outside its scope separately at hourly rates. Treat these as two data points, not a market rate.