Note 13. Foreign Service Retirement Actuarial Liability

FY 2003 Performance and Accountability Report
Bureau of Resource Management
December 2003
Report

The Foreign Service Retirement and Disability Fund finances the operations of the FSRDS and the FSPS. The FSRDS and the FSPS are defined-benefit single-employer plans. FSRDS was originally established in 1924; FSPS in 1986.

The FSRDS is a single-benefit retirement plan. Retirees receive a monthly annuity from FSRDS for the rest of their lives. FSPS provides benefits from three sources: a basic benefit (annuity) from FSPS, Social Security, and the Thrift Savings Plan.

The following table presents the calculation of the combined FSRDS and FSPS Pension Actuarial Liability and the assumptions used in computing it for the years ended September 30, 2003 and 2002 (Dollars in Millions).

 

Combined FSRDS and FSPS Pension Actuarial Liability
for the years ended September 30, 2003 and 2002
(Dollars in Millions)
  2003 2002
Pension Actuarial Liability, Beginning of Year $ 12,211.8  $ 11,766.9 
Add Pension Expense:    

Normal Cost

     227.0       198.0 

Interest on Pension Liability

     810.9       780.3 

Prior Service Costs

         —           — 

Actuarial Losses/(Gains)

     468.2 
single underline
      79.0 
single underline
Total Pension Expense    1,506.1     1,057.3 
Less Payments to Beneficiaries (annuities and refunds)     (624.1)
single underline
    (612.4)
single underline
Pension Actuarial Liability, End of Year   13,093.8    12,211.8 
Less: Net Assets Available for Benefits  (12,440.0)
single underline
 (11,887.0)
single underline
Actuarial Unfunded Pension Liability for Projected Plan Benefits $    653.8 
double underline
$    324.8 
double underline
Actuarial Assumptions:    

Rate of Return on Investments

6.25% 6.75%

Rate of Inflation

3.25% 3.75%

Salary Increase

4.00% 4.25%


Net Assets Available for Benefits at September 30, 2003 and 2002, consist of the following (Dollars in Thousands):

Net Assets Available for Benefits
At September 30, 2003 and 2002
(Dollars in Thousands)
  2003 2002
Fund Balances with Treasury $         43  $          — 
Receivables      202,949       203,793 
Investments in USG Securities   12,289,302 
single underline
  11,734,240 
single underline
Total Assets   12,492,294    11,938,033 
Less: FSRDF Liabilities      (52,298)
single underline
     (51,009)
single underline
Net Assets Available for Benefits $ 12,439,996 
double underline
$ 11,887,024 
double underline