What does GASB 68 require regarding underfunded liabilities?

GASB 68, which stands for the Governmental Accounting Standards Board Statement No. 68, addresses financial reporting for pension plans by state and local government employers. One of the key requirements of GASB 68 is for governments to disclose information about the pension liabilities, including details about when those liabilities are expected to be extinguished, or settled.

This means that underfunded liabilities must be accompanied by a projection of when they are anticipated to be paid off, providing stakeholders with insight into the government's obligations and the timeline for addressing those obligations. Such disclosures are essential for transparency and allow for better assessment of the government's financial condition in relation to its long-term pension commitments.

The other options do not align with the primary requirements outlined in GASB 68. While interest accumulation, immediate funding solutions, and tax increases may be considerations in the broader context of managing pension funds, they are not fundamental requirements for disclosure as per GASB 68. This makes the disclosure of projected extinguishment year of pension funds the correct focus in the context of the question.