Certified Government Financial Manager (CGFM) Practice Exam 2025 - Free CGFM Practice Questions and Study Guide

The correct answer is that an actuarial valuation for Other Post-Employment Benefits (OPEB) plans with a membership of 200 or more must be performed every two years, or biannually. This requirement is established by the guidance issued by the Governmental Accounting Standards Board (GASB).

The purpose of conducting these valuations is to ensure that the plan's liabilities are accurately assessed and that the necessary funding is being planned for future obligations. By performing valuations biannually, organizations can adjust their financial planning processes in response to changes in demographic factors, benefit structures, and other relevant variables.

The option suggesting that valuations need to be carried out every year is not aligned with GASB guidelines, which specify a two-year interval for plans of this size. Similarly, conducting valuations every three years would not provide the timely data needed for adequate financial planning and oversight. Lastly, the assertion that actuarial valuations are not required fails to recognize the necessity for sound financial management and transparency in government-related OPEB obligations.