# Effective Fiscal 2000

**Pension transactions**

The entries which follow illustrate accounting by an employer agency and
an administrative agency for activity involving pension benefit
transactions between the two entities.

**Note**: 1) The entries illustrated in this case study are to address
FASAB Liability Standard (#5). This is not an authoritative guidance but
an illustration of pension transactions using U.S. Standard General
Ledger accounts. This case study does not include all situations.

> 2\) One of the major revenue sources to the Civil Service Retirement
> and Disability Fund is from the general fund payment (appropriation)
> to the trust fund. It is not illustrated in this scenario because the
> objective was to show how the agencies and OPM record the pension
> expense and the pension liability as they relate to each other.

**Assumptions**:

> 1\) The payroll and pension is paid out once a month to CSRS enrolled
> employees. The employees contribute 7% and the employer agency makes a
> matching contribution of 7%. Assume there is no other deduction in
> employees payroll except for the retirement contribution.
>
> 2\) These assumptions do not relfect current CSRS contribution and
> witholding rates. See OPM Payroll Office letter +7-10 for guidance o
> future CSRS employer and employee rates.
>
> 3\) These example transactions do not reflect FERS transactions and
> therfore, do not present situations where the pension expense is less
> than the total employer and employee contributions. See interpretation
> #4 to FASAB 5 for guidance.

+--------------+-------------------------+----------------------------+
| EVENT        | AGENCY ENTRIES[^1]      | [ADMINISTRATIVE            |
| DESCRIPTION  | (Appropriated Fd)       | PLAN]{.smallcaps}=[S       |
|              |                         | ENTRIES]{.smallcaps} (OPM) |
+--------------+-------------------------+----------------------------+
| 1\) The      | *[pr                    | *                          |
| entities     | oprietary]{.underline}* | [proprietary]{.underline}* |
| record their |                         |                            |
| funding.     | 1010 FBWT 150,000       | None                       |
|              |                         |                            |
|              | > 3100 Unexp            | *[budgetary]{.underline}*  |
|              | > Appropriation 150,000 |                            |
|              |                         | None                       |
|              | *[                      |                            |
|              | budgetary]{.underline}* |                            |
|              |                         |                            |
|              | 4119 Other Appro Real   |                            |
|              | 150,000                 |                            |
|              |                         |                            |
|              | > 4510 Apportioned      |                            |
|              | > 150,000               |                            |
|              |                         |                            |
|              | 4510 Apportioned        |                            |
|              | 150,000                 |                            |
|              |                         |                            |
|              | > 4610 Allotments       |                            |
|              | > 150,000               |                            |
+--------------+-------------------------+----------------------------+
| 2a) Assume   | *[pr                    | *                          |
| the employer | oprietary]{.underline}* | [proprietary]{.underline}* |
| agency makes |                         |                            |
| an accrual   | 6100N Payroll expense   | **1311N Contribution       |
| for          | 110,000                 | receivable** 7,700         |
| retirement   |                         |                            |
| c            | 6400G Benefit expense\* | **1311G Contribution       |
| ontributions | 7,700                   | receivable** 7,700         |
| and employee |                         |                            |
| withholdings | > **2210N Acc. funded   | > 5400N Benefit revenue    |
| monthly.     | > payroll** 102,300     | > 7,700                    |
| Rather than  | >                       | >                          |
| showing this | > (Employees payroll,   | > 5400G Benefit revenue    |
| entry 11     | > net)                  | > 7,700                    |
| times, the   | >                       |                            |
| toal for 11  | > **2211N Withholding   | *[budgetary]{.underline}*  |
| months is    | > pay** 7,700           |                            |
| recorded in  | >                       | None                       |
| a single     | > **2213G Employer      |                            |
| entry.       | > Contrib pay** 7,700   |                            |
|              |                         |                            |
| Assume the   | 3100 Unexp              |                            |
| following:   | appropriation 117,700   |                            |
|              |                         |                            |
| each month   | > 5700 Appropriation    |                            |
| the Payroll  | > used 117,700          |                            |
| expense is   |                         |                            |
| 10,000       | *[                      |                            |
|              | budgetary]{.underline}* |                            |
| \$700 -      |                         |                            |
| contributed  | 4610 Allotments 117,700 |                            |
| by the       |                         |                            |
| agency for   | > 4901 Expended Auth -  |                            |
| retirement   | > unpd 117,700          |                            |
|              |                         |                            |
| \$700        |                         |                            |
| -contributed |                         |                            |
| by the       |                         |                            |
| employees    |                         |                            |
| for          |                         |                            |
| retirement   |                         |                            |
+--------------+-------------------------+----------------------------+
| 2b) The      | *[pr                    | *                          |
| agency pays  | oprietary]{.underline}* | [proprietary]{.underline}* |
| its          |                         |                            |
| employees    | **2210N Acc. funded     | 1010 FBWT 15,400           |
| and makes a  | payroll** 102,300       |                            |
| payment to   |                         | > **1311N Contribution     |
| the          | (Employees payroll,     | > receivable** 7,700       |
| ad           | net)                    | >                          |
| ministrative |                         | > **1311G Contribution     |
| agency.      | **2211N Withholding     | > receivable** 7,700       |
|              | pay** 7,700             |                            |
|              |                         | *[budgetary]{.underline}*  |
|              | **2213G Employer        |                            |
|              | Contrib pay** 7,700     | 4114\* Trust Fund receipts |
|              |                         | 15,400                     |
|              | > 1010 FBWT 117,700     |                            |
|              |                         | > 4620 Other Fds Ava for   |
|              | *[                      | > Comm/Oblig 15,400        |
|              | budgetary]{.underline}* |                            |
|              |                         |                            |
|              | 4901 Expended Auth -    |                            |
|              | unpd 117,700            |                            |
|              |                         |                            |
|              | > 4902 Expended Auth -  |                            |
|              | > pd 117,700            |                            |
+--------------+-------------------------+----------------------------+
| 3\) Assume   | *[pr                    | *                          |
| at the end   | oprietary]{.underline}* | [proprietary]{.underline}* |
| of the 12th  |                         |                            |
| month,       | 6100N Payroll expense   | **1311N Contribution       |
| employees=   | 10,000                  | receivable** 700           |
| salary,      |                         |                            |
| employees=   | 6400G Benefit exp 700   | **1311G Contribution       |
| w            |                         | receivable** 700           |
| ithholdings, | > **2210N Acc. funded   |                            |
| and agencies | > payroll** 9,300       | > 5400N Benefit revenue    |
| c            | >                       | > 700                      |
| ontributions | > (Employees payroll,   | >                          |
| were         | > net)                  | > 5400G Benefit revenue    |
| accrued.     | >                       | > 700                      |
|              | > **2211N Withholding   |                            |
|              | > pay** 700             | *[budgetary]{.underline}*  |
|              | >                       |                            |
|              | > **2213G Employer      | None                       |
|              | > Contrib pay** 700     |                            |
|              |                         |                            |
|              | 3100 Unexp              |                            |
|              | appropriation 10,700    |                            |
|              |                         |                            |
|              | > 5700 Appropriation    |                            |
|              | > used 10,700           |                            |
|              |                         |                            |
|              | *[                      |                            |
|              | budgetary]{.underline}* |                            |
|              |                         |                            |
|              | 4610 Allotments 10,700  |                            |
|              |                         |                            |
|              | > 4901 Expended Auth -  |                            |
|              | > unpd 10,700           |                            |
+--------------+-------------------------+----------------------------+
| 4\) During   | *[pr                    | *                          |
| the year     | oprietary]{.underline}* | [proprietary]{.underline}* |
| retirement   |                         |                            |
| annuity      | None                    | **2610N Actuarial Pension  |
| benefit was  |                         | liab** 10,000              |
| paid to the  | *[                      |                            |
| retirees.    | budgetary]{.underline}* | > 1010 FBWT 10,000         |
|              |                         |                            |
| Note:        | None                    | 6400N Benefit Expense\*    |
| recl         |                         | 10,000                     |
| assification |                         |                            |
| from         |                         | > 6800N Future Funded      |
| unfunded to  |                         | > expense 10,000           |
| funded       |                         |                            |
| accounts was |                         | *[budgetary]{.underline}*  |
| done for     |                         |                            |
| Statement of |                         | 4620 Other fds ava for     |
| Financing    |                         | comm/oblig 10,000          |
| purpose.     |                         |                            |
|              |                         | > 4902 Expended            |
|              |                         | > authority-pd 10,000      |
+--------------+-------------------------+----------------------------+
| 5\) At the   | *[pr                    | *                          |
| end of the   | oprietary]{.underline}* | [proprietary]{.underline}* |
| year accrual |                         |                            |
| for annuity  | None                    | **2610N Actuarial Pension  |
| benefits     |                         | liability** 5,000          |
| payable to   | *[                      |                            |
| retirees is  | budgetary]{.underline}* | > **2216N Pension benefits |
| made.        |                         | > due and payable** 5,000  |
|              | None                    |                            |
|              |                         | 6400N Benefit Expense\*    |
|              |                         | 5,000                      |
|              |                         |                            |
|              |                         | > 6800N Future Funded      |
|              |                         | > Expense 5,000            |
|              |                         |                            |
|              |                         | *[budgetary]{.underline}*  |
|              |                         |                            |
|              |                         | 4620 Other fds ava for     |
|              |                         | comm/oblig 5,000           |
|              |                         |                            |
|              |                         | > 4901 Expended            |
|              |                         | > authority-unpd 5,000     |
+--------------+-------------------------+----------------------------+
| 6\) At the   | *[pr                    | *                          |
| end of the   | oprietary]{.underline}* | [proprietary]{.underline}* |
| year, the    |                         |                            |
| unobligated  | None                    | None                       |
| balance was  |                         |                            |
| classified   | *[                      | *[budgetary]{.underline}*  |
| to receipts  | budgetary]{.underline}* |                            |
| unavailable  |                         | 4620 Other fds ava for     |
| for          | None                    | comm/oblig 400             |
| obligations. |                         |                            |
|              |                         | > 4389\* Authority         |
|              |                         | > unavaliable 400          |
+--------------+-------------------------+----------------------------+
| 7\) At the   | *[pr                    | *                          |
| year end,    | oprietary]{.underline}* | [proprietary]{.underline}* |
| the agency   |                         |                            |
| records cost | 6730 Imputed cost 7,200 | None                       |
| that will be |                         |                            |
| covered by   | > 5780 Imputed          | *[budgetary]{.underline}*  |
| imputed      | > Financing Source      |                            |
| financing.   | > 7,200                 | None                       |
| Imputed      |                         |                            |
| financing is | *[                      |                            |
| calculated   | budgetary]{.underline}* |                            |
| to be        |                         |                            |
| \$7,200.     | None                    |                            |
|              |                         |                            |
| Assume the   |                         |                            |
| cost factor  |                         |                            |
| is 20% of    |                         |                            |
| \$120,000.   |                         |                            |
| The cost of  |                         |                            |
| CSRS is      |                         |                            |
| \$24,000 for |                         |                            |
| the year.    |                         |                            |
|              |                         |                            |
| Both         |                         |                            |
| employer and |                         |                            |
| the employee |                         |                            |
| contributed  |                         |                            |
| 7%.          |                         |                            |
| \$120,000 x  |                         |                            |
| .07 x 2 =    |                         |                            |
| 16,800       |                         |                            |
|              |                         |                            |
| 24,000 -     |                         |                            |
| 16,800 =     |                         |                            |
| 7,200        |                         |                            |
+--------------+-------------------------+----------------------------+
| 8\) At the   | *[pr                    | *                          |
| end of the   | oprietary]{.underline}* | [proprietary]{.underline}* |
| year actuary |                         |                            |
| estimates    | None                    | 6800**N** Future Funded    |
| the pension  |                         | Expense[^2] 26,000         |
| expense to   | *[                      |                            |
| be \$26,000. | budgetary]{.underline}* | > **2610N Actuarial        |
| OPM used     |                         | > Pension liability**      |
| estimated    | None                    | > 26,000                   |
| payroll      |                         |                            |
| amount to    |                         | *[budgetary]{.underline}*  |
| \$130,000 to |                         |                            |
| calculate    |                         | None                       |
| service      |                         |                            |
| cost.        |                         |                            |
|              |                         |                            |
| 130,000 x .2 |                         |                            |
| = 26,000     |                         |                            |
+--------------+-------------------------+----------------------------+

**TRIAL BALANCE** - For Administrative Entity Only

+-----------------+-----------+-----------+------------+-------------+
| ACCOUNTS        | OPENING   | TRA       | P          | CLOSING     |
|                 | BALANCE   | NSACTIONS | RE-CLOSING | ENTRIES     |
|                 |           |           | TRIAL      |             |
|                 |           |           | BALANCE    |             |
+-----------------+-----------+-----------+------------+-------------+
| *Proprietary*   | 600,000   | 5,400     | 605,400    | 9,200       |
|                 |           |           |            |             |
| 1010 FBWT       | > 500,000 | 1,400     | 1,400      | 16,800      |
|                 | >         |           |            |             |
| **1311          | > 100,000 | > 5,000   | > 5,000    | > 15,000    |
| Contributions   |           | >         | >          |             |
| receivable**    | 600,000   | > 11,000  | > 511,000  | [11,000]{   |
|                 | 600,000   | >         | >          | .underline} |
| **2216 Pension  |           | > 16,800  | > 100,000  |             |
| Benefit         |           |           | >          | 26,000      |
| payable**       |           | 15,000    | > 16,800   | 26,000      |
|                 |           |           |            |             |
| **2610          |           | [1        | 15,000     |             |
| Actuarial       |           | 1,000]{.u |            |             |
| Pension         |           | nderline} | [11,000]{. |             |
| Liability**     |           |           | underline} |             |
|                 |           | 32,800    |            |             |
| 3210 Cumulative |           | 32,800    | 632,800    |             |
| result          |           |           | 632,800    |             |
|                 |           |           |            |             |
| 5400 Benefits   |           |           |            |             |
| revenue         |           |           |            |             |
|                 |           |           |            |             |
| 6400\* Benefits |           |           |            |             |
| expense         |           |           |            |             |
|                 |           |           |            |             |
| 6800 Future     |           |           |            |             |
| Funding expense |           |           |            |             |
+-----------------+-----------+-----------+------------+-------------+
| *[Budgetar      | 100,000   | 15,400    | 15,400     | > 15,400    |
| y]{.underline}* |           |           |            |             |
|                 | 100,000   | > 400     | 100,000    | 5,400       |
| 4114\* Trust    |           | >         |            |             |
| fund receipts   | 100,000   | > 5,000   | > 400      | [10,000]{   |
|                 | 100,000   |           | >          | .underline} |
| 4201 Total      |           | [1        | > 100,000  |             |
| actual          |           | 0,000]{.u | >          | 15,400      |
| resources       |           | nderline} | > 5,000    | 15,400      |
|                 |           |           |            |             |
| 4389\*          |           | 15,400    | [10,000]{. |             |
| Authority       |           | 15,400    | underline} |             |
| unavaliable     |           |           |            |             |
|                 |           |           | 115,400    |             |
| 4620 Other fds  |           |           | 115,400    |             |
| ava comm/oblig  |           |           |            |             |
|                 |           |           |            |             |
| 4901 Expended   |           |           |            |             |
| authority -     |           |           |            |             |
| unpd            |           |           |            |             |
|                 |           |           |            |             |
| 4902 Expended   |           |           |            |             |
| authority - pd  |           |           |            |             |
+-----------------+-----------+-----------+------------+-------------+

+-----------------------------------------------------------------------+
| CLOSING ENTRIES FOR OPM                                               |
+-----------------------------------------------------------------------+
| *[proprietary]{.underline}*                                           |
|                                                                       |
| 5400 Benefit revenue 16,800                                           |
|                                                                       |
| > 3210 Cumulative results 16,800                                      |
|                                                                       |
| 3210 Cumulative results 26,000                                        |
|                                                                       |
| > 6400 Benefit expense 15,000                                         |
| >                                                                     |
| > 6800 Future funding expense 11,000                                  |
|                                                                       |
| *[budgetary]{.underline}*                                             |
|                                                                       |
| 4201 Total actual resources 15,400                                    |
|                                                                       |
| > 4114 Trust fund receipts 15,400                                     |
|                                                                       |
| 4902 Expended authority - pd 10,000                                   |
|                                                                       |
| > 4201 Total actual resources 10,000                                  |
+-----------------------------------------------------------------------+

> ***Total Resources = Total Status***
>
> 4201 = 4389 + 4620 + 4901
>
> 105,400 = 400 + 100,000 + 5,000

+-----------------------------------------------------------------------+
| STATEMENT OF CHANGE IN NET POSITION - Administering entity            |
+-----------------------------------------------------------------------+
| 1\. Net Cost [9,200]{.underline}                                      |
|                                                                       |
| 3\. Net results of Operation [9,200]{.underline}                      |
|                                                                       |
| 5\. NetChange in Cumulative Results [9,200]{.underline}               |
|                                                                       |
| 7\. Change in Net Position 9,200                                      |
|                                                                       |
| 8\. Net Position - Beginning of the Period [100,000]{.underline}      |
|                                                                       |
| 9\. Net Position - End of the Period 109,200                          |
+-----------------------------------------------------------------------+
| STATEMENT OF NET COST - Administering entity                          |
+-----------------------------------------------------------------------+
| 6400 Benefits expense 15,000                                          |
|                                                                       |
| 6800 Future Funding expense 11,000                                    |
|                                                                       |
| 5400 Benefit Program revenue [(16,800)]{.underline}                   |
|                                                                       |
| > **Net Cost** 9,200                                                  |
+-----------------------------------------------------------------------+
| STATEMENT OF FINANCING - Administering entity                         |
+-----------------------------------------------------------------------+
| **1A. Obligations incurred**                                          |
|                                                                       |
| 4901 Expended Authority - unpd 5,000                                  |
|                                                                       |
| 4902 Expended Authority - pd 10,000                                   |
|                                                                       |
| **1B. Offsetting receipts**                                           |
|                                                                       |
| 4114-4389 (15,000)                                                    |
|                                                                       |
| **1F. Exchange revenue not in the entity=s budget**                   |
|                                                                       |
| 1313N Contribution receivable (700)                                   |
|                                                                       |
| **1313G Contribution recievable**[^3] (700)                           |
|                                                                       |
| 4389 Authority Unavaliable [(400)]{.underline}                        |
|                                                                       |
| > (1,800)                                                             |
|                                                                       |
| **4. Financing Sources Yet to be Provided**                           |
|                                                                       |
| 6800 Future funded expenses [11,000]{.underline}                      |
|                                                                       |
| > **Net Cost** 9,200                                                  |
+-----------------------------------------------------------------------+

[^1]:
    > For more details, see AEntries to record Pension cost, including
    > pension cost covered by imputed financing@ scenario.

[^2]: OPM calculates its service cost using the estimated payroll amount
    by the actuarial cost factor. The actual payroll amount is not
    available until later date. Currently service cost calculated by
    agencies and OPM is not reconciled and the difference is contributed
    by the different payroll amount that used in the calculations.

[^3]: Unlike the other Federal funds, Federal receivables are not
    considered as a budget authority in the trust fund. The trust
    receipt account only records cash, therefore recievables are not
    recognized as budget authority .