What are the two types of reporting required for Pension Funds?

Pension funds are required to provide two types of reporting: Plan and Employer reporting. This distinction is crucial in governmental accounting, as it reflects the different entities involved and their responsibilities.

Plan reporting focuses on the financial position and performance of the pension plan itself. It includes details about the plan's assets, liabilities, funding status, contributions, and investment performance. This reporting is essential for stakeholders to assess the sustainability and adequacy of the pension fund to meet future obligations to retirees.

Employer reporting, on the other hand, addresses how the pension obligations affect the employer's financial statements. It informs users about the costs and liabilities that the employer must recognize on their financial statements due to participating in or sponsoring a pension plan. This type of reporting aids in assessing the fiscal health of the employer entity in relation to its pension commitments.

Together, these two reporting aspects provide a comprehensive view of both the pension plan’s performance and the financial implications for the employer. Understanding these types of reporting is critical for those involved in governmental accounting and related financial reporting, ensuring transparency and accountability in how pension funds are managed and reported.