Annual Report Required by District of Columbia Retirement Reform Act
GGD-86-59: Published: Mar 26, 1986. Publicly Released: Mar 26, 1986.
- Full Report:
Pursuant to the District of Columbia Retirement Reform Act, GAO reviewed a report prepared by an actuarial firm on the disability retirement rate of District police officers and fire fighters to determine the 1985 disability retirement rate for fire fighters and police officers hired before February 15, 1980.
The act provides that annual federal payments be made to the District's Police Officers and Fire Fighters Retirement Fund; however, these payments are subject to reduction when the disability retirement rate exceeds an established limit to encourage the District Government to control disability retirement costs. A disability retirement rate of greater than .08 percent triggers a reduction in the next federal payment; therefore, the trigger mechanism governing the fiscal year 1987 payment is based on members retiring on disability in calendar year 1985 and is relative to members on board on January 1, 1985. The actuary's report showed that 17 members who were hired before February 15, 1980, retired on disability in 1985, and 4,147 police officers and fire fighters hired before that date were on active duty on January 1, 1985; therefore, the disability rate was determined to be .0041 percent. Since this rate was less than .08 percent, no reduction in the next annual payment was required. The District filed a lawsuit seeking additional payments for this retirement fund and the District Teachers and Judges Retirement Funds to cover unfunded liabilities that remained after the Funds were transferred to the District; however, the suit is still pending. GAO determined that the federal payment to the District, which includes the annual federal contribution to the Police Officers and Fire Fighters Retirement Fund, is subject to sequestration if the automatic spending reduction procedure under the Balanced Budget and Emergency Deficit Control Act of 1985 is triggered.