Federal Retirement Systems:
Unrecognized Costs, Inadequate Funding, Inconsistent Benefits
FPCD-77-48: Published: Aug 3, 1977. Publicly Released: Aug 3, 1977.
- Full Report:
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.