Certified Government Financial Manager (CGFM) Practice Exam

An actuarial valuation for Other Post-Employment Benefits (OPEB) plans with fewer than 200 members is required to be performed every three years according to accounting standards. This three-year interval is established to ensure that smaller plans can maintain a balance between providing accurate funding assessments and managing the cost and complexity associated with actuarial evaluations.

Smaller OPEB plans face different challenges compared to larger plans, where the frequency of valuations may need to be more stringent due to a larger number of participants and more complex benefits. The three-year cycle allows for sufficient time to gather data and reflect any changes in assumptions or conditions affecting the plan without overwhelming the administrative resources of smaller entities.

While some standards might suggest that more frequent valuations, such as yearly or every two years, are prudent for larger plans, this is not the case for those under the specified threshold. The option regarding being “optional” would not align with the requirement set forth in the accounting standards for periodic assessments to ensure adequate financial planning and accountability.