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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.
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EVENT DESCRIPTION AGENCY ENTRIES1 (Appropriated Fd) ADMINISTRATIVE PLAN=S ENTRIES (OPM)

1) The entities record their

funding.

proprietary

1010 FBWT 150,000

3100 Unexp Appropriation 150,000

budgetary

4119 Other Appro Real 150,000

4510 Apportioned 150,000

4510 Apportioned 150,000

4610 Allotments 150,000

proprietary

None

budgetary

None

2a) Assume the employer agency

makes an accrual for retirement

contributions and employee

withholdings monthly. Rather

than showing this entry 11 times,

the toal for 11 months is recorded

in a single entry.

Assume the following:

each month the Payroll expense is

10,000

$700 - contributed by the agency

for retirement

$700 -contributed by the

employees for retirement

proprietary

6100N Payroll expense 110,000

6400G Benefit expense* 7,700

2210N Acc. funded payroll 102,300

(Employees payroll, net)

2211N Withholding pay 7,700

2213G Employer Contrib pay 7,700

3100 Unexp appropriation 117,700

5700 Appropriation used 117,700

budgetary

4610 Allotments 117,700

4901 Expended Auth - unpd 117,700

proprietary

1311N Contribution receivable 7,700

1311G Contribution receivable 7,700

5400N Benefit revenue 7,700

5400G Benefit revenue 7,700

budgetary

None

 

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For more details, see AEntries to record Pension cost, including pension cost covered by imputed financing@ scenario.
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2b) The agency pays its

employees and makes a payment

to the administrative agency. 

proprietary

2210N Acc. funded payroll 102,300

(Employees payroll, net)

2211N Withholding pay 7,700

2213G Employer Contrib pay 7,700

1010 FBWT 117,700

budgetary

4901 Expended Auth - unpd 117,700

4902 Expended Auth - pd 117,700

proprietary

1010 FBWT 15,400

1311N Contribution receivable 7,700

1311G Contribution receivable 7,700

budgetary

4114* Trust Fund receipts 15,400

4620 Other Fds Ava for Comm/Oblig 15,400

3) Assume at the end of the 12th

month, employees= salary,

employees= withholdings, and

agencies contributions were

accrued.

proprietary

6100N Payroll expense 10,000

6400G Benefit exp 700

2210N Acc. funded payroll 9,300

(Employees payroll, net)

2211N Withholding pay 700

2213G Employer Contrib pay 700

3100 Unexp appropriation 10,700

5700 Appropriation used 10,700

budgetary

4610 Allotments 10,700

4901 Expended Auth - unpd 10,700

proprietary

1311N Contribution receivable 700

1311G Contribution receivable 700

5400N Benefit revenue 700

5400G Benefit revenue 700

budgetary

None

4) During the year retirement

annuity benefit was paid to the

retirees.

Note: reclassification from

proprietary

None

budgetary

None

proprietary

2610N Actuarial Pension liab 10,000

1010 FBWT 10,000

6400N Benefit Expense* 10,000

6800N Future Funded expense 10,000
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unfunded to funded accounts was

done for Statement of Financing

purpose.

budgetary

4620 Other fds ava for comm/oblig 10,000

4902 Expended authority-pd 10,000

5) At the end of the year accrual

for annuity benefits payable to

retirees is made.

proprietary

None

budgetary

None

proprietary

2610N Actuarial Pension liability 5,000

2216N Pension benefits due and payable 5,000

6400N Benefit Expense* 5,000

6800N Future Funded Expense 5,000

budgetary

4620 Other fds ava for comm/oblig 5,000

4901 Expended authority-unpd 5,000

6) At the end of the year, the

unobligated balance was classified

to receipts unavailable for

obligations.

proprietary

None

budgetary

None

proprietary

None

budgetary

4620 Other fds ava for comm/oblig 400

4389* Authority unavaliable 400

7) At the year end, the agency

records cost that will be covered

by imputed financing. Imputed

financing is calculated to be

$7,200.

Assume the cost factor is 20% of

$120,000. The cost of CSRS is

$24,000 for the year.

Both employer and the employee

proprietary

6730 Imputed cost 7,200

5780 Imputed Financing Source 7,200

budgetary

None

proprietary

None

budgetary

None
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contributed 7%. $120,000 x .07 x

2 = 16,800

24,000 - 16,800 = 7,200

8) At the end of the year actuary

estimates the pension expense to

be $26,000. OPM used estimated

payroll amount to $130,000 to

calculate service cost. 

130,000 x .2 = 26,000

proprietary

None

budgetary

None

proprietary

6800N Future Funded Expense226,000

2610N Actuarial Pension liability 26,000

budgetary

None

 

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.
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TRIAL BALANCE - For Administrative Entity Only

ACCOUNTS OPENING BALANCE TRANSACTIONS PRE-CLOSING TRIAL

BALANCE

CLOSING ENTRIES

Proprietary

1010 FBWT

1311 Contributions receivable

2216 Pension Benefit payable

2610 Actuarial Pension Liability

3210 Cumulative result

5400 Benefits revenue

6400* Benefits expense

6800 Future Funding expense

600,000

500,000

100,000

 

600,000 600,000

5,400

1,400

 5,000

11,000

16,800

15,000

11,000 

32,800 32,800

605,400

 1,400

 5,000

511,000

100,000

 16,800

 15,000

 11,000 

632,800 632,800

 9,200 

16,800

15,000

 

11,000

26,000 26,000

Budgetary

4114* Trust fund receipts

4201 Total actual resources

4389* Authority unavaliable

4620 Other fds ava comm/oblig

4901 Expended authority - unpd

4902 Expended authority - pd

100,000

100,000

 

100,000 100,000

15,400

 400

 5,000

 

10,000

15,400 15,400

 15,400

100,000

 400

100,000

 5,000

 

10,000

115,400 115,400

15,400

 5,400

 10,000 

15,400 15,400
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CLOSING ENTRIES FOR OPM

proprietary

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

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
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STATEMENT OF CHANGE IN NET POSITION - Administering entity

1. Net Cost 9,200 

3. Net results of Operation 9,200

5. NetChange in Cumulative Results 9,200

7. Change in Net Position 9,200

8. Net Position - Beginning of the Period 100,000

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)

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 recievable3 (700)

4389 Authority Unavaliable (400)

 (1,800)

4. Financing Sources Yet to be Provided

6800 Future funded expenses 11,000

Net Cost 9,200

 

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 . 
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