annuities are fully funded by the sum of employee and employer contributions
and interest earned by the Treasury bonds held by the CSRDF. The federal
government makes supplemental payments into the CSRDF on behalf of
employees covered by the CSRS because employee and agency contributions
and interest earnings do not meet the full cost of the benefits earned by employees
covered by that system.
The Office of Personnel Management (OPM) estimated that in FY2012, obligations
from the CSRDF would total $74.7 billion, of which $74.3 billion will
represent annuity payments to retirees and survivors. Other outlays
consist of refunds, payments to estates, and administrative expenses.
Outlays from the fund are projected to increase by 4.5% to $78.0 billion in
2013, of which $77.7 billion will represent annuity payments. OPM
estimated that receipts to the CSRDF from all sources would be $95.1
billion in 2012 and $94.2 billion in 2013. The year-end balance of the
CSRDF was projected to increase from $812.5 billion at the end of 2012 to
$823.2 billion at the end of 2013.
The total annual income of the CSRDF will increase from an estimated $102.5
billion in 2011 to an estimated $155.5 billion in 2025 and to $1.2
trillion in 2085. The total expenses of the fund are projected to rise
more slowly, increasing from $69.3 billion in 2011 to an estimated $116.2
billion in 2025 and to $669.7 billion in 2085. Consequently, the assets
held by the CSRDF also are projected to increase steadily, rising from
$784.6 billion in 2011 to an estimated $1.3 trillion in 2025 and $13.9
trillion in 2085. Expenditures from the CSRDF currently are about 36% as large as
federal expenditures for the salaries and wages paid to federal employees.
Pension expenditures are projected to decline relative to the government’s
wage and salary expenses, beginning around 2020. By 2085, the expenditures
of the CSRDF are estimated to be only about 23% as large as the government’s
expenditures for wage and salary payments to employees.
Because CSRS retirement benefits have never been fully funded by employer and
employee contributions, the Civil Service Retirement and Disability Fund
has an unfunded liability. The unfunded liability was $622.3 billion in
FY2010. According to actuarial estimates, the unfunded liability of the
CSRDF will continue to rise until about 2023, when it will peak at $684.8
billion. From that point onward, the unfunded liability will steadily
decline and is projected to turn into a surplus of $716.7 billion by 2085.
Actuarial estimates indicate that the unfunded liability of the CSRS does
not pose a threat to the solvency of the trust fund. In its annual report, OPM
has stated that “the total assets of the CSRDF, including both CSRS and
FERS, continue to grow throughout the term of the projection, and
ultimately reach a level of over 4.7 times payroll, or nearly 20 times the
level of annual benefit outlays” by 2085. Unlike the Social Security trust
fund, there is no point over the next 70 years at which the assets of the
Civil Service Retirement and Disability Fund are projected to run out.
Date of Report: January 10, 2013
Number of Pages: 18 Order Number: RL30023 Price: $29.95
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