Employees participate in one of three retirement programs of the U.S. government, based on the starting date of their employment with the federal government. These programs are the Civil Service Retirement System (CSRS), the Dual CSRS/Social Security System (Dual CSRS) and the Federal Employees Retirement System (FERS). The programs are administered by the Office of Personnel Management (OPM). The funding requirements and timing of employer and employee contributions into the programs can be altered at any time with the passage of a new law or an amendment of existing law by Congress and signed by the President. See Note 11, Retirement Programs, in the Notes to the Financial Statements for additional information.
All expenses of our retirement programs, except for retiree health benefits, are included in compensation and benefits expense. Retirement expenses represented 8.2% of total operating expenses in 2009, 7.6% in 2008 and 7.2% in 2007. Retirement expense of $5,917 million for current employees was $18 million, or 0.3%, greater than the 2008 expense of $5,899 million. The small change in 2009 is primarily a result of the decreasing size of the workforce which offset the rising cost per employee. The retirement expense increase of $162 million in 2008 relative to 2007 was attributable to the higher employer contributions resulting from higher average wage rates in 2008, largely due to COLAs.
As described in Note 3, Summary of Significant Accounting Policies, in the Notes to the Financial Statements, we account for our participation in the retirement programs of the U.S. government under multi-employer plan accounting rules, in accordance with Accounting Standard Codification (ASC) 715 (formerly FAS 87, Employers’ Accounting for Pensions). Although the Civil Service Retirement and Disability Fund (CSRDF) is a single fund and does not maintain separate accounts for individual agencies, P.L. 109-435 requires us to make certain disclosures regarding obligations and changes in net assets as if the funds were separate. All of the following information is provided by OPM and represents the most recent data available (i.e., actual data as of September 30, 2008) with projections to September 30, 2009.
