GAO was asked to provide information on the appropriateness of the Office of Personnel Management (OPM) cost determination as related to the increased retirement benefits granted to Panama Canal employees by legislation implementing the Panama Canal Treaty. In a previous report, GAO expressed concern that, unless OPM charged the Panama Canal Commission on a basis which considered future pay and cost-of-living increases, all costs of increased benefits would not be recovered as was the intent of Congress. OPM subsequently completed its cost calculations, and the Commission has paid the first installment on the increased retirement costs.
Recommendations for Executive Action
|Office of Personnel Management||1. The Director of OPM should charge the Panama Canal Commission on the basis of the current dynamic cost estimate of $377.3 million. OPM should periodically review the cost estimate to determine whether the economic assumptions and other actuarial factors used need revision and, if so, to adjust the billing accordingly.|