The Foreign Service Retirement and Disability Fund finances the operations of the FSRDS and the FSPS. The FSRDS and the FSPS are defined-benefit single-employer plans. FSRDS was originally established in 1924; FSPS in 1986.
The FSRDS is a single-benefit retirement plan. Retirees receive a monthly annuity from FSRDS for the rest of their lives. FSPS provides benefits from three sources: a basic benefit (annuity) from FSPS, Social Security, and the Thrift Savings Plan.
The following table presents the calculation of the combined FSRDS and FSPS Pension Actuarial Liability and the assumptions used in computing it for the years ended September 30, 2004 and 2003 (Dollars in Millions).
| 2004 | 2003 | |
|---|---|---|
| Pension Actuarial Liability, Beginning of Year | $ 13,093.8 | $ 12,211.8 |
|
Add Pension Expense: |
||
|
Normal Cost |
220.7 | 227.0 |
|
Interest on Pension Liability |
804.8 | 810.9 |
|
Prior Service Costs |
— | — |
|
Actuarial Losses/(Gains) |
(147.9) |
468.2 |
| Total Pension Expense | 877.6 | 1,506.1 |
| Less Payments to Beneficiaries (annuities and refunds) | (653.5) |
(624.1) |
| Pension Actuarial Liability, End of Year | 13,317.9 | 13,093.8 |
| Less: Net Assets Available for Benefits | (12,972.1) |
(12,440.0) |
| Actuarial Unfunded Pension Liability for Projected Plan Benefits | $ 345.8  |
$ 653.8 |
| Actuarial Assumptions: | ||
|
Rate of Return on Investments |
6.25% | 6.25% |
|
Rate of Inflation |
3.25% | 3.25% |
|
Salary Increase |
4.00% | 4.00% |
Net Assets Available for Benefits at September 30, 2004 and 2003, consist of the following (Dollars in Thousands):
| 2004 | 2003 | |
|---|---|---|
| Fund Balances with Treasury | $ 2 | $ 43 |
| Receivables | 198,512 | 202,949 |
| Investments in USG Securities | 12,827,628 |
12,289,302 |
| Total Assets | 13,026,142 | 12,492,294 |
| Less: FSRDF Liabilities | (54,074) |
(52,298) |
| Net Assets Available for Benefits | $ 12,972,068 |
$ 12,439,996 |
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