Federal Retirement Systems:

Unrecognized Costs, Inadequate Funding, Inconsistent Benefits

FPCD-77-48: Published: Aug 3, 1977. Publicly Released: Aug 3, 1977.

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The cost and liabilities of federal retirement programs are much greater than recognized by current costing and funding procedures.

In 1976, seven of the government's retirement systems paid over $15.6 billion to retirees and the survivors of deceased employees and retirees, an increase of $10 billion since 1970. The systems also reported liabilities exceeding $320 billion for which less than $44 billion had been set aside in federal trust funds. Federal retirement systems' funding requirements vary, but in most cases are less stringent than those imposed by law on private pension plans. Usually, little or no consideration is given to the effect of future general pay increases and annuity adjustments on ultimate benefit payments, resulting in considerable understatement of benefit costs accruing each year.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should enact legislation requiring that the full cost of federal retirement systems be recognized and funded and that the difference between currently accruing cost and employee contributions be charged to agency operations. In addition, Congress should establish an overall federal retirement policy to guide retirement system development. Centralization of committee jurisdiction over all federal employee retirement systems would facilitate the establishment and implementation of such a policy.


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