United States Government Accountability Office

GAO Report to Congressional Committees

FEDERAL PENSIONS

Judicial Survivors’ 

Annuities System 

Costs 

September 2008 

 

GAO-08-1104 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2008

FEDERAL PENSIONS

Judicial Survivors’ Annuities System Costs

Highlights of GAO-08-1104, a report to 

congressional committees 

The Judicial Survivors’ Annuities 

System (JSAS) was created in 1956

to provide financial security for the

families of deceased federal judges. 

It provides benefits to eligible 

spouses and dependent children of 

judges who elect coverage within 6 

months of taking office, 6 months 

after getting married, 6 months

after being elevated to a higher 

court, or during an open season

authorized by statute. Active and 

senior judges currently contribute

2.2 percent of their salaries to 

JSAS, and retired judges contribute 

3.5 percent of their retirement

salaries to JSAS. 

Pursuant to the Federal Courts

Administration Act of 1992 (Pub. L.

No. 102-572), GAO is required to

review JSAS costs every 3 years

and determine whether the judges’ 

contributions fund at least 50

percent of the plan’s costs during 

the 3-year period. If the

contributions fund less than 50

percent of these costs, GAO is to

determine what adjustments to the

contribution rates would be needed

to achieve the 50 percent ratio. 

What GAO Recommends

GAO is not making any 

recommendations in this report. 

The Administrative Office of the 

United States Courts (AOUSC) 

believes that GAO should be

recommending a reduction in the 

judges’ rate. GAO disagrees with 

AOUSC’s interpretation of the act’s 

requirements. 

For the 2005 to 2007 time frame covered by this review, the participating

judges funded approximately 54 percent of JSAS costs, and the federal 

government funded 46 percent. The increase in the government’s contribution 

rate over the 3-year period was a result of increases in costs. The increase in 

costs reflected the combined effects of changes in actuarial assumptions; 

lower-than-expected rates of return on plan assets; demographic changes such 

as retirement, death, disability, new members, and pay increases; as well as an

increase in plan benefit obligations. 

Judges’ and Federal Share of Costs

0

50

100

2005 2006 2007 

Percentage

Source: JSAS actuarial valuation reports 2005-2007.

Government’s share Judges’ share

61.1

38.9 49.7 50.5

50.3 49.5

GAO determined that an adjustment to the judges’ contribution rate was not 

needed because their average contribution share for the 3-year period 

exceeded the 50 percent minimum contribution goal specified by law. GAO 

examined the annual share of normal costs covered by judges’ contributions 

over a 9-year period and found that, on average, the participating judges 

funded approximately 60 percent of JSAS’s costs. 

To view the full product, including the scope 

and methodology, click on GAO-08-1104. 

For more information, contact Steven J. 

Sebastian, (202) 512-3406 

sebastians@gao.gov, Joseph A. Applebaum, 

(202) 512-6336, applebaumj@gao.gov. 
Contents 

Letter 1

Objectives, Scope, and Methodology 2

Results in Brief 3 

Background 4

Portion of JSAS Cost Covered by Judges’ Contributions Varied 7 

No Adjustment Required to Contribution Rates 9 

Agency Comments and Our Evaluation 9 

Appendix I Retirement Plans Available to Federal Judges 12 

Appendix II Explanation of the Method Used to Determine the 

Federal Government’s Contribution Rate and Lump 

 Sum Payout 14 

Appendix III Comments from the Administrative Office of the 

United States Courts 16 

Tables 

Table 1: Percentage Share of JSAS Normal Costs Borne by 

Participating Judges and the Federal Government, Plan 

Years 2005 to 2007 8 

Table 2: Percentage Share of Contribution for Judges and the 

Federal Government 9 

Page i GAO-08-1104 Judicial Survivors' Annuities System Costs
Abbreviations 

AOUSC Administrative Office of the United States Courts 

COLA cost of living adjustment 

CSRS Civil Service Retirement System 

FERS Federal Employees’ Retirement System 

JSAS Judicial Survivors’ Annuities System 

This is a work of the U.S. government and is not subject to copyright protection in the 

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permission from GAO. However, because this work may contain copyrighted images or 

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Page ii GAO-08-1104 Judicial Survivors' Annuities System Costs
United States Government Accountability Office

Washington, DC 20548 

September 17, 2008 

The Honorable Patrick J. Leahy 

Chairman 

The Honorable Arlen Specter 

Ranking Member 

Committee on the Judiciary 

United States Senate 

The Honorable John Conyers, Jr. 

Chairman 

The Honorable Lamar Smith 

Ranking Member 

Committee on the Judiciary 

House of Representatives 

This report was prepared in response to the Federal Courts Administration 

Act of 1992,1

 which requires that we review certain aspects of the Judicial 

Survivors’ Annuities System (JSAS). JSAS is a voluntary plan, and it is the 

only survivor benefit plan available to Article III2

 judges and certain nonArticle III judges.3

 JSAS provides annuities to surviving spouses and 

dependent children of (1) deceased Supreme Court justices, (2) deceased 

judges of the United States, and (3) other deceased judicial officials4

 who 

participated in JSAS. 

The 1992 Act enhanced the benefits available from JSAS and reduced the

amounts that participating judges were required to contribute toward the 

plan’s costs. The act requires us to review JSAS costs every 3 years and to

determine whether the judges’ contributions fund at least 50 percent of the 

 1

Pub. L. No. 102-572, 106 Stat. 4506 (Oct. 29, 1992). 

2

This refers to judicial positions defined under Article III of the U.S. Constitution which 

establishes the judicial branch as one of the three separate and distinct branches of the 

federal government. The other two are the legislative and executive branches. 

3

Non-Article III judges are judges of the U.S. territories, bankruptcy and magistrate judges, 

and judges of the U.S. Court of Federal Claims. 

4

As noted in appendix I, virtually all of those eligible to participate in JSAS are judges. For 

simplicity, we will refer to the collective group of judicial participants as “judges” 

throughout this report. 

Page 1 GAO-08-1104 Judicial Survivors' Annuities System Costs
plan’s costs. If the contributions fund less than 50 percent of these costs, 

we are to determine what adjustments to the contribution rates would be 

needed to achieve the 50 percent ratio. 

The judicial system has determined that JSAS costs are the same as 

normal cost; for this review, we have examined the normal cost rates of 

the plan. The plan’s actuary, using the plan’s funding method—in this case, 

the aggregate cost method5

—determines the plan’s normal cost rate and 

the normal cost for each plan year. The normal cost rate is the level 

percentage of future salaries that will be sufficient, along with investment 

earnings and the plan’s assets, to pay the plan’s benefits. The normal cost 

for a plan year is the normal cost rate multiplied by the participants’ 

salaries for that year. This is our fifth report since the passage of the 1992 

Act.6

Our objectives were to determine whether participating judges’ 

contributions for the 3 plan years ending on September 30, 2007, funded at 

least 50 percent of the JSAS costs and, if not, what adjustments in the 

contribution rates would be needed to achieve the 50 percent ratio. To 

satisfy our objectives, we used the normal cost rates determined by 

actuarial valuations of the system for each of the 3 fiscal years. We also 

examined participants’ contributions, the federal government’s 

contribution, and other relevant information in each plan years’ JSAS 

actuarial valuation report. An independent accounting firm hired by the 

Administrative Office of the United States Courts (AOUSC) audited the 

JSAS financial and actuarial information included in the JSAS actuarial 

valuation reports, with input from the plan’s actuary regarding relevant 

data, such as the actuarial present value of accumulated plan benefits. The 

plan’s actuary certified those amounts that are included in the JSAS 

actuarial valuation reports. We discussed the contents of the JSAS 

actuarial valuation reports with officials from AOUSC for the 3 plan years 

(2005 through 2007). 

Objectives, Scope, 

and Methodology 

 5

The aggregate cost method is essentially the spreading of any unfunded present value of

future benefits as a level percentage of the future payroll. 

6

GAO, Federal Pensions: Judicial Survivors’ Annuities System Costs, GAO-05-955 

(Washington, D.C.: September 16, 2005); GAO, Federal Pensions: Judicial Survivors’

Annuities System Costs, GAO-02-763 (Washington, D.C.: June 26, 2002); Federal Pensions:

Judicial Survivors’ Annuities System Costs, GAO/GGD-00-125 (Washington, D.C.: May 25,

2000); and Federal Pensions: Judicial Survivors’ Annuities System Costs and Benefit

Levels, GAO/GGD-97-87 (Washington, D.C.: June 27, 1997). 

Page 2 GAO-08-1104 Judicial Survivors' Annuities System Costs
In addition, we discussed with the plan’s actuary the actuarial assumptions 

made to project future benefits of the plan. We noted that the JSAS 

actuarial valuation for plan years 2005 through 2007 used a 0.0 percent 

salary increase per year, above inflation, in contrast to the September 30, 

2007, Civil Service Retirement and Disability System valuation which used 

a 0.75 percent salary increase per year, above inflation. We determined 

that the use of 0.0 percent salary increase for the JSAS is reasonable, and 

consistent with a recent trend analysis we performed on judicial pay 

plans.7

 We also reviewed the qualifications of the plan’s actuary who 

prepared the JSAS actuarial valuation reports for plan years 2005 to 2007 

and nothing came to our attention that would lead us to question the 

qualifications of the actuary. We did not independently audit the JSAS 

actuarial valuation reports or the actuarially calculated cost figures. 

We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require that we

plan and perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based on our 

audit objectives. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on our audit 

objectives. We performed our review in Washington, D.C., from June 2008 

through August 2008. We made a draft of this report available to the 

Director of AOUSC for review and comment. 

For the 3 years covered by our review, the participating judges’ 

contributions funded about 54 percent of JSAS normal costs–slightly more 

than 61 percent and 50 percent of JSAS normal costs during the plan years 

2005 and 2006, respectively and slightly less than 50 percent during plan 

year 2007. The federal government’s share of JSAS normal costs over the 

3-year period amounted to, on average, approximately 46 percent. While 

the judges’ contribution rate remained fixed at 2.2 percent and 3.5 percent 

of salaries for active participants and retired judges, respectively, the 

federal government contribution rate increased from 1.48 percent of 

salaries in plan year 2005, to 2.5 percent of salaries in plan year 2006, and

to 2.59 percent of salaries in plan year 2007. 

Results in Brief 

 7

GAO, Human Capital: Trends in Executive and Judicial Pay, GAO-06-708 (Washington,

D.C.: June 2006). 

Page 3 GAO-08-1104 Judicial Survivors' Annuities System Costs
The increase in the federal government’s contribution rate was the result 

of increases in JSAS normal costs. The increase in normal costs resulted 

from several combined factors, such as changes in the actuarial 

assumptions; lower than expected returns on plan assets; demographic 

changes such as retirement, death, disability, new members, and pay 

increases; as well as an increase in plan benefit obligations. 

We determined that no adjustment to the judges’ contribution rate was 

needed because the judges’ average contribution share for the statutorily 

designated 3 year period was approximately 54 percent, which exceeded 

the 50 percent contribution goal specified by law. From plan year 1999 

through plan year 2007, the proportion of normal costs funded by judges’ 

contributions has averaged approximately 60 percent. 

In commenting on a draft of this report, the AOUSC raised the issue of 

parity between the participating judges and the federal government with 

respect to funding of JSAS. It also noted that we did not propose a 

reduction in the contribution rates of judges given that their share of JSAS 

costs for the 3-year period covered by this report exceeded 50 percent of 

the total normal costs of the program. We disagree with AOUSC’s view as 

to the purpose of section 201 (i) of the Federal Courts Administration Act 

of 1992.8

 Since enactment, we have interpreted this section as providing a 

minimum percentage of the costs of the program to be borne by its 

participants because the statute requires us to recommend adjustments 

when the judges’ contributions have not achieved 50 percent of the costs 

of the fund.

Depending on the circumstances, judicial participants may be eligible for 

some combination of five retirement plans, including the Civil Service

Retirement System (CSRS) or the Federal Employees’ Retirement System 

(FERS). Three other separate retirement plans, described in appendix I,

apply to various groups of judges in the federal judiciary, with JSAS being 

available to participants in all three retirement plans to provide annuities 

to their surviving spouses and children. 

Background 

 8

Section 201 (i) says: “the Comptroller General of the United States shall, at the end of each 

3-fiscal year period, determine whether the contributions by judicial officials...during that

3-year period accounted for 50 percent of the costs of the Judicial Survivors’ Annuities fund 

and if not, then what adjustments in the contribution rates...should be made to achieve 

that 50 percent figure.” See 28 U.S.C. §376 (w). 

Page 4 GAO-08-1104 Judicial Survivors' Annuities System Costs
JSAS was created in 1956 to help provide financial security for the families 

of deceased federal judges. It provides benefits to surviving eligible 

spouses and dependent children of judges who participate in the plan. 

Judges may elect coverage within 6 months of taking office, 6 months after 

getting married, if they were not married when they took office, 6 months 

after being elevated to a higher court, or during an open season authorized 

by statute. Active and senior judges9 currently contribute 2.2 percent of 

their salaries to JSAS, and retired judges contribute 3.5 percent of their 

retirement salaries to JSAS. Upon a judge’s death, the surviving spouse is 

to receive an annual annuity that equals 1.5 percent of the judge’s average 

annual salary during the 3 highest consecutive paid years (commonly 

known as the high-3) times the judge’s years of creditable service. The 

annuity may not exceed 50 percent of the high-3 and is guaranteed to be

no less than 25 percent. Separately, an unmarried dependent child under 

age 18, or 22 if a full-time student, receives a survivor annuity that is equal

to 10 percent of the judge’s high-3 or 20 percent of the judges’ high-3 

divided by the number of eligible children, whichever is smaller. JSAS 

annuitants receive an annual adjustment in their annuities at the same 

time, and by the same percentage, as any cost-of-living adjustment (COLA) 

received by CSRS annuitants. Spouses and children are also eligible for 

Social Security survivor benefits. 

History of JSAS 

Since its inception in 1956, JSAS has been amended several times. Because 

of concern that too few judges were participating in the plan, Congress 

made broad reforms effective in 1986 with the Judicial Improvements Act 

of 1985.10 The 1985 act (1) increased the annuity formula for surviving 

spouses from 1.25 percent to the current 1.5 percent of the high-3 for each 

year of creditable service and (2) changed the provisions for surviving 

child benefits to relate benefit amounts to judges’ high-3 rather than the 

specific dollar amounts provided in 1976 by the Judicial Survivors’ 

Annuities Reform Act.11 In recognition of the significant benefit 

improvements that were made, the 1985 act increased the amounts that 

judges were required to contribute from 4.5 percent to 5 percent of their 

salaries, including retirement salaries. 

 9

Article III judges, who are eligible to retire but continue to hear cases on a full or part-time 

basis, are referred to as senior judges. 

10Pub. L. No. 99-336, 100 Stat. 633 (June 19, 1986). 

11Pub. L. No. 94-554, 90 Stat. 2603 (Oct. 19, 1976). 

Page 5 GAO-08-1104 Judicial Survivors' Annuities System Costs
The 1985 act also changed the requirements for government contributions 

to the plan. Under the 1976 Judicial Survivors’ Annuities Reform Act, the 

government matched the judges’ contributions of 4.5 percent of salaries 

and retirement salaries. The 1985 act modified this by specifying that the

government would contribute the amounts necessary to fund any 

remaining cost over the future lifetime of current participants. That 

amount is limited to 9 percent of total covered salary each year. 

In response to concerns that required contributions of 5 percent may have 

created a disincentive to participate, Congress enacted the Federal Courts 

Administration Act of 1992. Under this act, participants’ contribution 

requirements were reduced to 2.2 percent of salaries for active and senior

judges and 3.5 percent of retirement salaries for retired judges. The 1992 

act also significantly increased benefits for survivors of retired judges. 

This increase was accomplished by including years spent in retirement in 

the calculation of creditable service and the high-3 salary averages.12

Additionally, the 1992 act allowed judges to stop contributing to the plan if

they ceased to be married and granted benefits to survivors of any judge 

who died in the interim between leaving office and the commencement of 

a deferred annuity.13

As of September 30, 2007, there were 1,303 active and senior judges, 223 

retired judges, and 333 survivor annuitants covered under JSAS, according 

to the JSAS actuarial valuation report for plan year 2007. 

Calculation of Federal 

Share 

JSAS is financed by judges’ contributions and direct appropriations in an 

amount estimated to be sufficient to fund the future benefits paid to 

survivors of current and deceased participants.14 The plan’s actuary, using 

the plan’s funding method—in this case, the aggregate cost method—

determines the plan’s normal cost rate and the normal costs for each plan

year. The normal cost rate is the level percentage of future salaries that 

will be sufficient, along with investment earnings and the plan’s assets, to 

pay the plan’s benefits for current participants and beneficiaries. Normal 

cost calculations are estimates and require that many actuarial 

 12The 1992 Act changes include senior judges and judges who resign from their offices. 

13A judge who is not entitled to receive an immediate annuity upon leaving office, but who 

is eligible to receive a deferred annuity at a later date, may—upon written notification—

remain in JSAS by contributing a sum equal to 3.5 percent of the deferred annuity. 

14JSAS investments are made only in U.S. Treasury securities. 

Page 6 GAO-08-1104 Judicial Survivors' Annuities System Costs
assumptions be made about the future, including, but not limited to 

mortality rates, turnover rates, and returns on investment, salary 

increases, and COLA increases over the life spans of current participants 

and beneficiaries. There are many acceptable actuarial methods for 

calculating normal cost. Regardless of which cost method is chosen, the 

expected total long-term cost of the plan should be the same; however, 

year-to-year costs may differ, depending on the cost method used. The 

expected annual federal, actuarially recommended contribution is the 

product of the federal government’s contribution rate and the participating 

judges’ salaries. However, the actual federal government contribution is 

approved through annual appropriations which have varied, both above 

and below the actuarially recommended amount.

To determine the actuarially recommended annual contribution of the 

federal government, AOUSC, which is responsible for the administration

of the JSAS, engages an enrolled actuary15 to perform the calculation of 

funding needed based on the difference between the present value of the 

expected future benefit payments to participants and the present value of 

net assets in the plan. Appendix II provides more details on the 

methodology used to determine the federal government’s contribution rate 

and lump sum payments. 

For JSAS plan years 2005 through 2007, the participating judges 

contributed, on average, about 54 percent of the plan’s costs. In plan years 

2005 and 2006, participating judges paid slightly more than 61 percent and 

50 percent of JSAS normal costs, respectively, and in plan year 2007, they 

paid slightly less than 50 percent of JSAS normal costs. 

Portion of JSAS Cost 

Covered by Judges’ 

Contributions Varied 

Table 1 shows the judges’ and the federal government’s contribution rates 

and shares of JSAS’ normal costs (using the aggregate cost method, which 

is discussed in appendix II) for the period covered in our review. 

 15An enrolled actuary is an individual who has been licensed by the Joint Board for the 

Enrollment of Actuaries to perform a variety of actuarial tasks that the Employee 

Retirement Income Security Act of 1974 mandates for private sector defined benefit 

pension plans in the United States.

Page 7 GAO-08-1104 Judicial Survivors' Annuities System Costs
Table 1: Percentage Share of JSAS Normal Costs Borne by Participating Judges and the Federal Government, Plan Years 

2005 to 2007 

JSAS normal cost rates and shares 

2005 2006 2007

2005-2007 

Average

Source of contributions Ratea

SharebRateaSharebRateaSharebsharec

Judges 2.32 61.1 2.53 50.3 2.54 49.5 53.6

Government 1.48 38.9 2.50 49.7 2.59 50.5 46.4

Total normal costs 3.80 100.0 5.03 100.0 5.13 100.0 100.0

Source: JSAS actuarial valuation reports, 2005-2007. 

a

Normal cost expressed as a percentage of the present value of participant’s future salaries. 

b

Percentage of total normal cost. 

c

This represents the average of the annual share of JSAS normal costs. 

The judges’ and the federal government’s contribution rates for each of the 

3 years shown in Table 1 were based on the actuarial valuations that 

occurred at the end of the prior year. For example, the judges’ 

contribution rate of 2.32 percent and the federal government’s 

contribution rate of 1.48 in plan year 2005 were based on the September 

30, 2004, valuation contained in the plan year 2005 JSAS report. 

The total normal costs expressed as a percentage of the present value of 

participant’s future salaries shown in table 1 increased from 3.8 percent in 

plan year 2005 to 5.13 percent in plan year 2007. The judges’ share of the 

JSAS normal costs decreased from approximately 61 percent in plan year

2005, to approximately 50 percent in plan years 2006 and 2007. The federal 

government’s share of JSAS normal costs increased, from approximately 

39 percent in plan year 2005, to approximately 50 percent in plan years 

2006 and 2007. During those same years, the government’s contribution 

rates increased from 1.48 percent of salaries in plan year 2005 to 2.5 

percent of salaries in plan year 2006, and then to 2.59 percent in plan year

2007. The increase in the federal government’s contribution rates was a 

result of the increase in normal costs resulting from several combined 

factors, such as changes in actuarial assumptions; lower-than-expected

investment experience on plan assets; demographic changes—retirement, 

death, disability, new members, pay increases; as well as an increase in 

plan benefit obligations. However, the majority of the increase in the 

federal government’s contribution rate is because of changes in actuarial 

assumptions and a lesser degree the government’s contributing less than 

the actuarially recommended amounts, in plan years 2005, 2006, and 2007. 

Page 8 GAO-08-1104 Judicial Survivors' Annuities System Costs
Based on our review of the judges’ contribution rates for the JSAS, we 

determined that there was no need for any adjustments in the judges’ 

contribution rate. JSAS actuarial reports for the 3 years under review 

show that participating judges’ contributed at least 50 percent of JSAS 

normal costs as required by the Federal Courts Administration Act for plan 

years 2005 and 2006, and slightly below half for plan year 2007. As shown 

in Table 1 above, the judges’ average contribution for JSAS normal costs 

for this review period was approximately 54 percent, which exceeded the 

50 percent contribution goal for judges. 

Table 2 provides a summary of the percentage share of contribution for 

judges and the federal government over the past 9 years. 

Table 2: Percentage Share of Contribution for Judges and the Federal Government 

Plan year 1999 2000 2001 2002 2003 2004 2005 2006 2007

Average 

sharea

Aggregate normal costsb3.92 5.04 5.07 3.66 2.97 3.00 3.80 5.03 5.13 100.0

Government’s contribution rateb1.50 2.60 2.60 1.34 .65 .68 1.48 2.50 2.59 —

Judges’ contribution rateb2.42 2.44 2.47 2.32 2.32 2.32 2.32 2.53 2.54 —

Judges’ sharec61.7 48.4 48.7 63.4 78.0 77.3 61.1 50.3 49.5 59.8

Government’s sharec38.3 51.6 51.3 36.6 22.0 22.7 38.9 49.7 50.5 40.2

Source: JSAS actuarial valuation reports, 1999-2007. 

a

This represents the average of the annual share of JSAS normal costs.

b

Normal cost expressed as a percentage of the present value of participant’s future salaries. 

c

Percentage of total normal cost. 

As shown above, the judges’ contribution share, in any given year, may 

vary from the 50 percent contribution goal, either exceeding or not 

meeting this goal. The judges’ average contribution share for the 9-year 

period was approximately 60 percent. Therefore, there is no reason to 

modify the judges’ contribution rates at this time. 

We requested comments on a draft of this report from the Director of 

AOUSC or his designee. In a letter dated September 10, 2008, the Director 

provided written comments on the report, which we have reprinted in 

appendix III. AOUSC also provided technical comments, which we have 

incorporated as appropriate. 

No Adjustment 

Required to 

Contribution Rates 

Agency Comments 

and Our Evaluation 

Page 9 GAO-08-1104 Judicial Survivors' Annuities System Costs
In its comments, AOUSC stated that our report showed that for a third 

consecutive triennial cycle, judges have paid a greater share of the cost of 

this system. AOUSC stated that our report showed that over the past 9 

years, judges’ contributions have funded approximately 60 percent of the 

costs of JSAS. In AOUSC’s view, we did not present in our report the 

downward adjustment that would be needed to the participating judges’

contribution rates to attain the 50 percent level, and this omission is not 

consistent with Congress’s intent in enacting the Federal Courts 

Administration Act of 1992. 

We disagree with AOUSC’s view as to the purpose of section 201(i), of the 

Act. Since enactment, we have interpreted this section as providing a 

minimum percentage of the costs of the program to be borne by its 

participants because the statute requires us to recommend adjustments 

when the judges’ contributions have not achieved 50 percent of the costs 

of the fund. We do not view the section as calling for parity between the 

participants and the federal government with respect to funding the 

program. For the 3-years covered by this review, we determined and 

reported that judges’ contributions represented approximately 54 percent

of the normal costs of JSAS, and therefore, an adjustment to the judges’

contribution rates was not needed under the existing legislation because 

the judges’ contribution achieved 50 percent of JSAS costs. We have 

consistently applied this interpretation of the Act’s requirements in all of 

our previously mandated reviews. 

However, if one were to interpret the Act as calling for an equal sharing of 

the program’s cost between participants and the government, then, on the 

basis of the information contained in the JSAS actuarial reports over the 

last 9 years, participating judges’ future contributions would have to 

decrease a total of 0.32 percentage points below the current 2.2 percent of 

salaries for active judges and senior judges and 3.5 percent for retired 

judges in order to fund 50 percent of JSAS costs over the last 9 years. If the 

decrease were distributed equally among the judges, those currently 

contributing 2.2 percent of salaries would have to contribute 1.88 percent, 

and those currently contributing 3.5 percent of retirement salaries would 

have to contribute 3.18 percent. 

We have not declined to include downward adjustment information, as 

AOUSC states, but we are not recommending such an adjustment because

of our interpretation of the statute’s requirements. 

We are sending copies of this report to interested congressional 

committees and the Director of AOUSC. Copies of this report will be made 

Page 10 GAO-08-1104 Judicial Survivors' Annuities System Costs
available to others upon request. This report is also available at no charge 

on the GAO Web site at http://www.gao.gov. Please contact Steven J. 

Sebastian at (202) 512-3406 sebastians@gao.gov, or Joseph A. Applebaum 

at (202) 512-6336 applebaumj@gao.gov, if you or your staff have any 

questions concerning this report. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Key contributors to this report were Julie Phillips, Assistant

Director; Jehan Abdel-Gawad; and Kwabena Ansong. 

Steven J. Sebastian 

Director 

Financial Management and Assurance 

Joseph A. Applebaum 

Chief Actuary 

Applied Research and Methods 

Page 11 GAO-08-1104 Judicial Survivors' Annuities System Costs
Appendix I: Retirement Plans Available to Appendix I: Retirement Plans A Federal Judges vailable to 

Federal Judges 

The Administrative Office of the United States Courts (AOUSC) 

administers three retirement plans for judges in the federal judiciary. 

• The Judicial Retirement System automatically covers United States 

Supreme Court justices; federal circuit and district court judges; and 

territorial district court judges; and is available, at their option, to the 

Administrative Assistant to the Chief Justice; the Director of AOUSC; 

and the Director of the Federal Judicial Center. 

• The Judicial Officers’ Retirement Fund is available to bankruptcy and 

full-time magistrate judges. 

• The United States Court of Federal Claims Judges’ Retirement System 

is available to the United States Court of Federal Claims judges. 

Also, judges who are not automatically covered under the Judicial 

Retirement System may opt to participate in the Federal Employees’ 

Retirement System (FERS)1

 or elect to participate in the Judicial 

Retirement System for bankruptcy judges, magistrate judges, or United 

States Court of Federal Claims judges. 

Judges who retire under the judicial retirement plans generally continue to

receive the full salary amounts that were paid immediately before 

retirement, assuming the judges met the age and service requirements. 

Retired territorial district court judges generally receive the same cost-ofliving adjustment that Civil Service Retirement System retirees receive,

except that their annuities cannot exceed 95 percent of an active district 

court judge’s salary. United States Court of Federal Claims judge retirees 

continue to receive the same salary payable to active United States Court 

of Federal Claims judges. 

Those in the Judicial Retirement System and the United States Court of 

Federal Claims Judges’ Retirement System are eligible to retire when the 

number of years of service and the judge’s age total at least 80, with a 

minimum retirement age of 65, and service ranging from 10 to 15 years. 

 1

FERS is open and available to new federal employees including judges. The Civil Service 

Retirement System (CSRS) has been closed to new employees since December 31, 1983. 

However, a newly appointed judge who had prior federal service (at least 5 years of service 

before January 1, 1987) may still elect CSRS. 

Page 12 GAO-08-1104 Judicial Survivors' Annuities System Costs
Appendix I: Retirement Plans Available to 

Federal Judges

Those in the Judicial Officers’ Retirement Fund are eligible to retire at age 

65 with at least 14 years of service or may retire at age 65 with 8 years of 

service, on a less than full salary retirement. Participants in all three 

judicial retirement plans are required to contribute to and receive Social 

Security benefits. 

Page 13 GAO-08-1104 Judicial Survivors' Annuities System Costs
Appendix II: Explanation of the Method Used

to Determine the Federal Government’s Appendix II: Explanation of the Method Used Contribution Rate and Lump Sum Payout 

to Determine the Federal Government’s 

Contribution Rate and Lump Sum Payout 

Aggregate funding method. This method, as used by the Judicial 

Survivors’ Annuities System (JSAS) plan, defines the normal cost rate as 

the level percentage of future salaries that will be sufficient, along with 

investment earnings and the plan’s assets, to pay the plan’s benefits for 

current participants and beneficiaries. The following discussion is 

intended to illustrate the use of the aggregate funding method.

For plan year 2007, the JSAS’s actuary estimated the present value of 

future benefits for participating judges and beneficiaries was $649,628,473

and the JSAS had assets amounting to $491,788,627. The difference 

between these amounts, $157,839,846, must be financed through future 

contributions to be paid by the participating judges and the federal 

government. Using the same assumptions as used to estimate the present 

value of future benefits, the actuary estimated the present value of 

participating judges’ future salaries to be $3,078,464,410 so that the 

amount to be financed represented 5.13% ($157,839,846 divided by 

$3,078,464,410) of the future participating judges’ salaries. This percentage

is the JSAS’s normal cost rate. If all the actuarial assumptions proved 

exactly correct, then a total contribution of 5.13% of the participating 

judges’ salaries annually would make up the difference between the JSAS’s

future payments and its assets (the $157,839,846 mentioned above). The 

JSAS’s actuary also estimated the present value of participating judges’ 

future contributions to be $78,123,909. Thus the federal government’s 

share for plan year 2007 is the difference between $157,839,846 and 

$78,123,909, or $79,715,937. 

Federal government’s actuarially recommended contribution rate. 

The federal government’s actuarially recommended contribution rate is 

equal to the federal government’s share of future financing ($79,715,937) 

divided by the present value of the participating judges’ future salaries 

($3,078,464,410). For the plan year 2007 the rate was 2.59% ($79,715,937 

divided by $3,078,464,410). Thus, the actuarially recommended federal 

contribution is the product of the federal government’s actuarially 

recommended contribution rate and the participating judges’ salaries. The 

federal government’s contribution is approved through an annual 

appropriation. It has varied, both above and below the actuarially 

recommended amount. 

Lump sum payout. Under JSAS, a lump sum payout may occur upon the 

dissolution of marriage either through divorce or death of spouse. Payroll 

contributions cease, but previous contributions remain in JSAS. Also, if 

there is no eligible surviving spouse or child upon the death of a 

Page 14 GAO-08-1104 Judicial Survivors' Annuities System Costs
Appendix II: Explanation of the Method Used

to Determine the Federal Government’s 

Contribution Rate and Lump Sum Payout 

participating judge, the lump sum payout to the judge’s designated 

beneficiaries is computed as follows: 

• Lump sum payout equals the total amount paid into the plan by the 

judge plus 3 percent annual interest accrued, less 2.2 percent of 

salaries for each participating year (forfeited amount). 

In effect, the interest plus any amount contributed in excess of 2.2 percent 

of judges’ salaries will be refunded. 

Page 15 GAO-08-1104 Judicial Survivors' Annuities System Costs
Appendix III: Comments from the 

Administrative Office of the United States 

Courts 

Page 16 GAO-08-1104 (196187) Judicial Survivors' Annuities System Costs
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