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Most U.S. Federal retirement plans are now fully funded, but since plan assets must legally be invested in Federal securities, fund surpluses are used to reduce overall Federal budget deficits. As a result, current taxpayers are not charged with the cost of future Federal retirement obligations. Nevertheless, Federal rules do require the employing Federal agency to budget for current personnel’s accruing liability of retirement promises. Therefore policy decisions regarding the number of Federal civilian and military personnel and the design of their retirement benefits may be made with a better understanding of the costs.
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© 2008 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.
Opinions and errors are solely those of the author and not of the institutions with whom the author is affiliated. This research was presented at the 2008 Pension Research Council Symposium.
Date Posted: 07 August 2019