a

GAO

United States Government Accountability Office

Report to Congressional Committees

September 2005 FEDERAL PENSIONS

Judicial Survivors’ 

Annuities System 

Costs

GAO-05-955
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-955.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Steven J. 

Sebastian at (202) 512-3406 or 

sebastians@gao.gov. 

Highlights of GAO-05-955, a report to the 

Senate and House Committees on the 

Judiciary 

September 2005

FEDERAL PENSIONS

Judicial Survivors’ Annuities System 

Costs 

During plan years 2002 through 2004, the participating judges’ contributions 

funded more than 50 percent of the JSAS normal costs, as shown in the 

figure below. The participating judges funded approximately 75 percent of 

JSAS normal costs during plan year 2002, 64 percent during plan year 2003, 

and 78 percent during plan year 2004. On average over the 3-year period, the 

participating judges funded approximately 72 percent of JSAS normal costs, 

while the federal government funded approximately 28 percent. The 

variance in the government’s contribution rates was a result of the 

fluctuation in normal costs resulting from several combined factors, such as 

changes in assumptions; lower-than-expected rates of return on plan assets; 

demographic changes—retirement, death, disability, new members, and pay 

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

JSAS Normal Costs 

Federal government's share Judges' share

0

20

40

60

80

100

Percentage

Source: JSAS actuarial reports, 2002-2004.

2002

25.1

74.9

2003

36.3

63.7

2004

21.6

78.4

For the 3 years covered by the review, GAO determined that an adjustment 

to the judges’ contribution rate was not needed because their average 

contribution share for the review period was approximately 72 percent, 

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

In addition, 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 55 percent of JSAS’s normal 

costs. 

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, or 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 50 percent of 

the plan’s costs. 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. 

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’ contribution rate. GAO 

disagrees with AOUSC’s 

interpretation of the act’s 

requirements. 
Page i GAO-05-955 Judicial Survivors' Annuities System Costs 

Letter 1

Results in Brief 2 

Background 3 

Objectives, Scope, and Methodology 6 

Judges Paid More Than Half of JSAS’s Costs 7 

Adjustment to Contribution Rates Not Needed 9 

Agency Comments and Our Evaluation 11 

Appendix I Retirement Plans Available to Federal Judges 13 

Appendix II Formulas Used to Determine Judges’ and the 

Federal Government’s Contributions and Lump 

Sum Payments 15 

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 2002-2004 8 

Table 2: Average Percentage Share of Contribution for Judges and 

the Federal Government 10 

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 

NC normal cost 

PVFNC present value of future normal costs 

Contents 
Page ii GAO-05-955 Judicial Survivors' Annuities System Costs 

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

United States. It may be reproduced and distributed in its entirety without further 

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

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Page 1 GAO-05-955 Judicial Survivors' Annuities System Costs 

September 16, 2005 

The Honorable Arlen Specter 

Chairman 

The Honorable Patrick J. Leahy 

Ranking Minority Member 

Committee on the Judiciary 

United States Senate 

The Honorable F. James Sensenbrenner, Jr. 

Chairman 

The Honorable John Conyers, Jr. 

Ranking Minority Member 

Committee on the Judiciary 

House of Representatives 

This report was prepared in response to the requirements of the Federal 

Courts Administration Act of 1992,1

 which requires that we review certain 

aspects of the Judicial Survivors’ Annuities System (JSAS). JSAS is the 

only survivor benefit plan available to Article III judges and certain nonArticle III judges. JSAS provides annuities to surviving spouses and 

dependent children of deceased Supreme Court justices, deceased judges 

of the United States, and other deceased judicial officials2 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 

plan’s costs. If the contributions fund less than 50 percent of these costs, 

we are to determine what adjustments to the contribution rates are needed 

to achieve the 50 percent ratio. 

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

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

 1

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

2

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

throughout this report. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-955 Judicial Survivors' Annuities System Costs 

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

aggregate cost method3

—determines the plan’s normal cost. Under the 

aggregate cost method, the normal cost 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. This is our fourth report since the 

passage of the 1992 act.4

For each of the 3 years covered by our review, the judges’ contributions 

funded more than 50 percent of JSAS normal costs. The participating 

judges funded approximately 75 percent of JSAS normal costs during plan 

year 2002, 64 percent of JSAS normal costs during plan year 2003, and 78 

percent of JSAS normal costs during plan year 2004. On the basis of data 

from plan years 2002, 2003, and 2004 actuarial reports, participating judges 

funded, on average, approximately 72 percent of JSAS normal costs; the 

federal government’s contribution amounted to, on average, 

approximately 28 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 

fluctuated from 0.80 percent of salaries in plan year 2002, to 1.34 percent 

of salaries in plan year 2003, and to 0.65 percent of salaries in plan year 

2004. 

The variance in the federal government’s contribution rates was a result of 

the fluctuation in normal costs resulting from several combined factors, 

such as changes in assumptions; lower-than-expected return on plan 

assets; demographic changes—retirement, death, disability, new members, 

and pay increases; as well as an increase in plan benefit obligations. Based 

on our work for the 3 years covered by our review, we determined that an 

adjustment to the judges’ contribution rate was not needed because their 

average contribution share for the review period was approximately 72 

percent, which exceeded the 50 percent minimum contribution goal 

specified by law. 

 3

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

future benefits as a level percentage of the future payroll. 

4

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). 

Results in Brief 
Page 3 GAO-05-955 Judicial Survivors' Annuities System Costs 

One of the major reasons JSAS benefits were enhanced and judges’ 

contribution rates were reduced in 1992 was to increase participation in 

JSAS. If judges continue to pay an increasing share of the normal cost of 

the plan, however, their rate of participation might decline. In part 

because of the comparatively small number of participants, short-term 

variability can be expected in JSAS normal costs; therefore, a long-term 

view is important when evaluating the portion of normal costs covered by 

judges. From plan year 1996 to plan year 2004, the annual contribution of 

normal costs funded by judges’ contributions has averaged approximately 

55 percent. 

In commenting on a draft of this report, the Administrative Office of the 

United States Courts (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 1992.5

 Since the 

enactment of the act, we have interpreted this section as providing that a 

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

participants. We have consistently applied this interpretation of the act’s 

requirement in all of our previous mandated reviews. 

Most federal civilian employees are covered by the Civil Service 

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

Both of these retirement plans include survivor benefit provisions. Three 

separate retirement plans 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. 

Appendix I provides additional information regarding retirement plans 

that are available to federal judges. 

 5

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). 

Background 
Page 4 GAO-05-955 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, or 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. 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. 

Since its inception in 1956, JSAS has changed several times. Because of 

concern that too few judges were participating in the plan (74 percent of 

federal judges participated in 1985, which was down from 90 percent in 

1976), Congress made broad reforms effective in 1986 with the Judicial 

Improvements Act of 1985.6

 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 children’s 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.7

 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. 

The 1985 act also changed the requirements for government contributions 

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

 6

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

7

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

History of JSAS 
Page 5 GAO-05-955 Judicial Survivors' Annuities System Costs 

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. Despite 

the benefit improvements in the 1985 act, the rate of participation in JSAS 

continued to decline. In 1991, the rate of participation was about 40 

percent overall and 25 percent for newly appointed judges. 

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.8

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.9

As of September 30, 2004, there were 1,329 active and senior judges, 207 

retired judges, and 304 survivor annuitants covered under JSAS, compared 

with 1,265 active and senior judges, 193 retired judges, and 283 survivor 

annuitants as of September 30, 2002. 

AOUSC is responsible for administering and maintaining reliable 

information on JSAS. JSAS is financed by judges’ contributions and direct 

appropriations in an amount estimated to be sufficient to fund future 

benefits paid to survivors of current and deceased participants.10 The 

federal government’s contribution is approved through an annual 

appropriation and is not based on a rate or percentage of the judges’ 

salaries. 

 8

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

9

A 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. 

10JSAS investments are made only in U.S. Treasury securities. 

Defining Cost for JSAS 
Page 6 GAO-05-955 Judicial Survivors' Annuities System Costs 

To determine the annual contribution of the federal government, AOUSC 

engages an enrolled actuary11 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 value of net assets in the plan. 

Appendix II provides more details on the formulas used to determine 

participants’ and the federal government’s contributions and lump sum 

payments. 

The cost of a retirement or survivor benefit plan is typically not measured 

by annual expenditures for benefits. Such expenditures are not an 

indicator of the overall long-term cost of a plan. The more complete 

calculation of a plan’s cost is the present value of projected future outlays 

to retirees or survivors, based on the current pool of participants, with 

such costs allocated annually. This annual cost allocation is referred to as 

the normal cost. Normal cost calculations, prepared by an actuary, are 

estimates and require that many actuarial assumptions be made about the 

future, including mortality rates, turnover rates, returns on investment, 

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

participants and beneficiaries. The plan’s actuary, using the plan’s funding 

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

normal cost. Under the aggregate cost method, the normal cost 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. 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. 

Our objectives were to determine whether participating judges’ 

contributions for the 3 plan years ending on September 30, 2004, 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 examined the normal costs reported in the JSAS 

annual report submitted by AOUSC to the Comptroller General for plan 

 11An 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. 

Objectives, Scope, 

and Methodology 
Page 7 GAO-05-955 Judicial Survivors' Annuities System Costs 

years 2002 through 2004.12 We also examined participants’ contributions, 

the federal government’s contribution, and other relevant information in 

each annual report. An independent accounting firm hired by AOUSC 

audited the JSAS financial and actuarial information included in the JSAS 

annual reports, with input from an enrolled actuary regarding relevant 

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

enrolled actuary certified those amounts that are included in the JSAS 

annual reports. We discussed the contents of the JSAS reports with 

officials from AOUSC for the 3 plan years (2002 through 2004). In addition, 

we discussed with the enrolled actuary the actuarial assumptions made to 

project future benefits of the plan. We did not independently audit the 

JSAS annual report or the actuarially calculated cost figures. 

We performed our review in Washington, D.C., from May 2005 through 

July 2005, in accordance with U.S. generally accepted government auditing 

standards. We made a draft of this report available to the Director of 

AOUSC for review and comment. The Director’s comments are reprinted 

in appendix III. 

For each of the JSAS plan years 2002 through 2004, participating judges 

funded more than 50 percent of the JSAS normal costs. In plan year 2002, 

participating judges paid approximately 75 percent of JSAS normal costs, 

and in plan years 2003 and 2004, they paid approximately 64 and 78 

percent of JSAS normal costs, respectively. 

On the basis of data from plan years 2002, 2003, and 2004, participating 

judges paid, on average, approximately 72 percent of JSAS normal costs 

while the federal government’s share amounted to approximately 28 

percent. Table 1 shows judges’ and the federal government’s contribution 

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

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

 12In prior years, this report was submitted to Congress in compliance with chapter 95 of 

Title 31, U.S. Code, and in accordance with GAO’s instructions. This requirement was 

repealed by Pub. L. No. 105-362 on November 10, 1998, but AOUSC continues to prepare 

the report by adhering to GAO instructions with regard to report format and content. 

Judges Paid More 

Than Half of JSAS’s 

Costs 
Page 8 GAO-05-955 Judicial Survivors' Annuities System Costs 

Table 1: Percentage Share of JSAS Normal Costs Borne by Participating Judges 

and the Federal Government, Plan Years 2002-2004 

Source: JSAS actuarial reports, 2002-2004. 

a

Normal cost expressed as a percentage of participants’ salaries. 

b

Percentage of total normal costs. 

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 valuation that 

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

contribution rate of 2.39 percent and the federal government’s 

contribution rate of 0.80 percent in plan year 2002 were based on the 

September 30, 2001, valuation contained in the plan year 2002 JSAS report. 

The judges’ contribution of JSAS normal costs shown in table 1 fluctuated 

from approximately 75 percent in plan year 2002, to approximately 64 

percent in plan year 2003, and to 78 percent in plan year 2004. The federal 

government’s contribution of JSAS normal costs also varied, from 

approximately 25 percent in plan year 2002, to approximately 36 percent in 

plan year 2003, and to approximately 22 percent in plan year 2004. During 

those same years, judges’ contribution rates remained almost constant, 

while the federal government’s contribution rate increased from 0.80 

percent of salaries in plan year 2002 to 1.34 percent of salaries in plan year 

2003, and then decreased to 0.65 percent in plan year 2004. The variance in 

the federal government’s contribution rates was a result of the fluctuation 

in normal costs resulting from several combined factors, such as changes 

in assumptions; lower-than-expected return on plan assets; demographic 

changes—retirement, death, disability, new members, and pay increases; 

as well as an increase in plan benefit obligations. 

Specifically, the value of total plan assets increased from $473.8 million in 

plan year 2002 to $484.0 million in plan year 2003, and then decreased to 

 JSAS normal cost rates and shares 

2002 2003 2004 

Source of 

funds Ratea

 SharebRateaSharebRatea Shareb

2002-2004

Average sharec

Judges 2.39 74.9 2.35 63.7 2.36 78.4 72.3

Federal 

government .80 25.1 1.34 36.3 .65 21.6 27.7

Total normal 

costs 3.19 100.0 3.69 100.0 3.01 100.0 100.0
Page 9 GAO-05-955 Judicial Survivors' Annuities System Costs 

$479.8 million in plan year 2004. However, accumulated plan benefit 

obligations increased steadily, from $385.4 million in plan year 2002, to 

$388.5 million in plan year 2003, and to $393.9 million in plan year 2004. 

Although the judges’ contribution rate remained fairly constant, their 

contribution of normal costs rose to approximately 78 percent in plan year 

2004 because total normal costs decreased. During 2004 plan year, 

contributions from the federal government and judges totaled almost 

$5.1 million, somewhat less than the actuarial cost of $6.9 million. A 

primary reason for the difference between total contributions and the 

plan’s actuarial cost was that the approximately 1.3 percent return on the 

market value of plan assets was lower than the 6.25 percent assumed rate 

of investment return on plan assets. The resulting actuarial loss increased 

the required contribution level for the plan by 0.82 percent of total payroll 

for participating judges. 

Based on information in JSAS actuarial reports for the 3 years under 

review, we have determined that participating judges’ future contributions 

do not have to increase in order to cover the minimum 50 percent of JSAS 

costs required by the Federal Courts Administration Act. We found that 

the current contribution rates of 2.2 percent of salaries for active and 

senior judges and 3.5 percent of retirement salaries for retired judges are 

sufficient to cover at least 50 percent of JSAS costs.13 As shown in table 1, 

the judges’ average contribution for JSAS costs for this review period was 

approximately 72 percent, which exceeded the 50 percent contribution 

goal for judges. 

Because future normal costs are estimates that may change in any given 

year, adjusting judges’ contribution rates14 whenever they are found to be 

generating more or less than 50 percent of JSAS costs is not practical. 

Future normal costs may change because of certain events that occur 

 13There is a distinction between retired judges who resign their offices and those who retire 

to a status designated as “senior.” Judges who retire by resignation are entitled for life to 

the salary of the office at the time of resignation and may engage in private law practice. 

Judges who retire to senior status receive the current salary of the office—that is, they 

receive salary increases that are approved for active judges and generally may perform 

reduced judicial duties. Senior judges may not engage in private law practice. 

14Because current statutory provisions governing participant contribution rates do not give 

AOUSC the authority to modify the contribution rate of participants, new legislation would 

be required. No new legislation governing participant contribution rates has been enacted 

since the 1992 Federal Courts Administration Act. 

Adjustment to 

Contribution Rates 

Not Needed 
Page 10 GAO-05-955 Judicial Survivors' Annuities System Costs 

during the course of a year, such as the number of survivors or judges who 

die, the number of new judges electing to participate in JSAS, and the 

number of judges who retire, and because the values of, and rates of 

return on, plan assets could create normal statistical variances that would 

affect the annual normal costs of the plan. Because the plan has only 1,536 

participants and 304 survivor annuitants, such variances can have a 

significant effect on expected normal costs and lead to short-term 

variability. Therefore, it is important to take a long-term view when 

evaluating whether contribution rates for judges are appropriate to 

achieve a 50 percent JSAS contribution share for judges. 

For example, as shown in table 2, although the judges’ contribution share 

for plan year 2004 was approximately 78 percent, the judges’ average 

contribution share for plan years 1996 through 2004 was approximately 55 

percent—significantly closer to the 50 percent contribution goal. 

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

Plan year 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average sharea

Aggregate normal 

costsb

 6.26 5.77 5.07 3.86 4.97 4.96 3.19 3.69 3.01 100.0

Government's 

contribution rateb 4.00 3.50 2.80 1.50 2.60 2.60 .80 1.34 .65 --

Judges' contribution 

rateb 2.26 2.27 2.27 2.36 2.37 2.36 2.39 2.35 2.36 --

Judges' sharec 36.1 39.3 44.8 61.1 47.7 47.6 74.9 63.7 78.4 54.84

Government's sharec 63.9 60.7 55.2 38.9 52.3 52.4 25.1 36.3 21.6 45.16

Source: JSAS actuarial reports, 2002-2004. 

a

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

b

Normal cost expressed as a percentage of participants’ salaries. 

c

Percentage of total normal cost. 

Another drawback to making frequent changes to the judges’ contribution 

rate in response to short-term fluctuations in their contribution share 

could be a decline in JSAS participation. Increasing participation was a 

major reason for the changes made to JSAS in 1992. From plan years 1998 

through 2004, the number of judges participating in JSAS increased 8 

percent, from 1,420 to 1,536. 
Page 11 GAO-05-955 Judicial Survivors' Annuities System Costs 

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

AOUSC or his designee. In a letter dated August 23, 2005, 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. 

In its comments, AOUSC stated that our report showed that judges’ 

contributions to JSAS have become disproportionately high, but that we 

were not suggesting a change in the contribution rate for judges. 

Specifically, AOUSC stated that we did not present in our report the 

adjustment that would be needed to the participating judges’ contribution 

rates to achieve the 50 percent funding of the program’s costs by the 

judges. In AOUSC’s view, 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. Thus, for the 3 years covered by this review, we determined and 

reported that judges’ contributions funded approximately 72 percent of 

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

contribution rates was not needed under the existing legislation because 

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

consistently applied this interpretation of the act’s requirement in all of 

our previous mandated reviews. 

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

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

basis of the information contained in the JSAS actuarial report as of 

September 30, 2004, participating judges’ future contributions would have 

had to decrease a total of 0.86 percentage points below the current 2.2 

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

retirement salaries for retired judges in order to fund 50 percent of JSAS 

costs over the past 3 years. If the decrease were distributed equally among 

the judges, those currently contributing 2.2 percent of salaries would have 

had to contribute 1.34 percent, and those currently contributing 3.5 

percent of retirement salaries would have had to contribute 2.64 percent. 

Agency Comments 

and Our Evaluation 
Page 12 GAO-05-955 Judicial Survivors' Annuities System Costs 

As we have noted both in this report and prior reports, because of the 

yearly fluctuations that are experienced by JSAS, short-term trends are not 

sufficient for use in making informed decisions. As we stated in our report, 

future normal costs may change because of certain events that occur 

during the course of a year, such as the number of survivors or judges who 

die, the number of new judges electing to participate in JSAS, and the 

number of judges who retire. Also, the values of, and rates of return on, 

plan assets could create normal statistical variances that would affect the 

annual normal costs of the plan. Therefore, it is important to take a longterm view when evaluating whether rates for judges are appropriate to 

achieve a 50 percent minimum JSAS contribution share for judges. 

We are sending copies of this report to the Director of AOUSC. Copies of 

this report will be made 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 or 

sebastians@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 Hodge Herry, Assistant Director; Joseph 

Applebaum; Jacquelyn Hamilton; Amy Bowser; and Kwabena Ansong. 

Steven J. Sebastian 

Director 

Financial Management and Assurance 
Appendix I: Retirement Plans Available to 

Federal Judges 

Page 13 GAO-05-955 Judicial Survivors' Annuities System Costs 

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 fulltime magistrate judges. 

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

available to the United States Court of Federal Claims judges. 

Also, except for judges who are automatically covered under the Judicial 

Retirement System, judges and judicial officials 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. 

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 

 1

FERS is open and available to new federal employees. 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. 

Appendix I: Retirement Plans Available to 

Federal Judges 
Appendix I: Retirement Plans Available to 

Federal Judges 

Page 14 GAO-05-955 Judicial Survivors' Annuities System Costs 

judicial retirement plans are required to contribute to and receive Social 

Security benefits. 
Appendix II: Formulas Used to 

Determine Judges’ and the 

Federal Government’s 

Contributions and Lump Sum 

Payments 

Page 15 GAO-05-955 Judicial Survivors' Annuities System Costs 

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

Survivors’ Annuities System (JSAS) plan, defines the normal cost 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 formula is as follows: 

• The present value of future normal costs (PVFNC) equals the present 

value of future benefits less net asset value. 

PVFNC is the amount that remains to be financed by judges and the 

federal government. 

The normal cost (NC) percentage equals PVFNC divided by present value 

of future salaries. 

Federal government contribution. The following formula is used to 

determine the federal government’s contribution amount: 

• The federal government contribution represents the portion of NC not 

covered by participants’ contributions. 

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 

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

beneficiaries is computed as follows: 

• Lump sum payout equals 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. 

Appendix II: Formulas Used to Determine 

Judges’ and the Federal Government’s 

Contributions and Lump Sum Payments 
Page 16 GAO-05-955 Judicial Survivors' Annuities System Costs 

Appendix III: Comments from the 

Administrative Office of the United States 

Courts 
Page 17 GAO-05-955 Judicial Survivors' Annuities System Costs 
Page 18 GAO-05-955 Judicial Survivors' Annuities System Costs (196069) 
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