Note 12. Federal Employee Benefits
These liabilities consist of:
Federal Employee Benefits Liabilities
(In Thousands)
|
FY 2007 |
FY 2006 |
Actuarial FECA Liability |
$164,416 |
$170,164 |
NOAA Corps Retirement System Liability |
416,000 |
370,600 |
NOAA Corps Post-retirement Health Benefits Liability |
45,400
![single underline](images/rule_single.gif) |
49,200
![single underline](images/rule_single.gif) |
Total |
$625,816
![double underline](images/rule_double.gif) |
$589,964
![double underline](images/rule_double.gif) |
Actuarial FECA Liability:
Actuarial FECA liability is calculated annually, as of September 30. For discounting projected annual future benefit payments to present value, the interest rate assumptions used by DOL were as follows:
Interest Rate Assumptions
|
FY 2007 |
FY 2006 |
Year 1 |
4.93% |
5.17% |
Year 2 and Thereafter |
5.08% |
5.31% |
The wage inflation factors (Cost of Living Allowance) and medical inflation factors (Consumer Price Index - Medical) applied to the calculation of projected future benefits, and also used to adjust the methodology’s historical payments to current year constant dollars, were as follows:
Wage and Medical Inflation Factors
FY 2007
Fiscal Year |
Cost of Living Allowance |
Consumer Price Index - Medical |
2008 |
2.63% |
3.74% |
2009 |
2.90% |
4.04% |
2010 |
2.47% |
4.00% |
2011 |
2.37% |
3.94% |
2012 |
2.30% |
3.94% |
Wage and Medical Inflation Factors
FY 2006
Fiscal Year |
Cost of Living Allowance |
Consumer Price Index - Medical |
2007 |
3.50% |
4.00% |
2008 |
3.13% |
4.01% |
2009 |
2.40% |
4.01% |
2010 |
2.40% |
4.03% |
2011 |
2.43% |
4.09% |
NOAA Corps Retirement System Liability:
This liability represents the unfunded actuarial present value of projected plan benefits. The actuarial calculation is performed annually, as of September 30. The September 30, 2007 and 2006 actuarial calculations used the following U.S. Department of Defense Retirement Board of Actuaries economic assumptions:
U.S. Department of Defense Retirement Board Economic Assumptions
|
FY 2007 |
FY 2006 |
Investment Earnings on Federal Securities |
6.00% |
6.25% |
Annual Basic Pay Scale Increases |
3.75% |
3.75% |
Annual Inflation |
3.00% |
3.00% |
The related pension costs included in the Consolidated Statements of Net Cost are as follows:
Related Pension Costs
(In Thousands)
|
FY 2007 |
FY 2006 |
Normal Cost |
$ 5,100 |
$ 6,000 |
Interest on the Unfunded Liability |
22,600 |
21,400 |
Prior and Past Service Cost from Plan Amendments |
10,200 |
- |
Actuarial (Gains) Losses, Net |
|
|
Impact of New Investment Return |
14,600 |
- |
Impact of Updated Data for Active Duty Members, Retirees, and Survivors |
6,100 |
12,200 |
Impact of New Demographic Assumptions |
5,500
![single underline](images/rule_single.gif) |
(1,900)
![single underline](images/rule_single.gif) |
Total Pension Costs |
$64,100
![double underline](images/rule_double.gif) |
$37,700
![double underline](images/rule_double.gif) |
The Prior and Past Service Cost from Plan Amendments for FY 2007 results from two recent law changes: a) effective January 1, 2007, the 75 percent of base pay maximum for non-disability retirements was eliminated; and b) effective April 1, 2008, the reduction in benefits payable under the Survivor Benefits Plan that applied when the survivor reached age 62 will be fully phased out.
NOAA Corps Post-retirement Health Benefits Liability:
This liability represents the unfunded actuarial present value of projected post-retirement plan benefits. The actuarial calculation is performed annually, as of September 30. The actuarial calculations used the same U.S. Department of Defense Retirement Board of Actuaries economic assumptions as used for the NOAA Corps Retirement System actuarial calculations.
The related post-retirement health benefits costs included in the Consolidated Statements of Net Cost are as follows:
Related Post-Retirement Health Benefits Costs
(In Thousands)
|
FY 2007 |
FY 2006 |
Normal Cost |
$1,200 |
$2,800 |
Interest on the Unfunded Liability |
2,900 |
2,700 |
Actuarial (Gains)/Losses, Net |
(4,900)
![single underline](images/rule_single.gif) |
1,300
![single underline](images/rule_single.gif) |
Total Post-retirement Health Benefits Costs |
$ (800)
![double underline](images/rule_double.gif) |
$6,800
![double underline](images/rule_double.gif) |
|