107 NOTES TO THE FINANCIAL STATEMENTS 

Note 13. Federal Employee and Veteran Benefits Payable 

Federal Employee and Veteran Benefits Payable as of September 30, 2022, and 2021 

Civilian Military Total Total 

(In billions of dollars) 2022 2021 2022 2021 2022 2021 

Pension benefits ......................................... 2,556.0 2,361.8 2,513.5 1,933.6 5,069.5 4,295.4 

Veterans compensation and burial benefits .. N/A N/A 5,965.1 4,302.3 5,965.1 4,302.3 

Post-retirement health benefits .................... 427.4 427.3 1,045.0 868.7 1,472.4 1,296.0 

Veterans education and training benefits ...... N/A N/A 170.0 151.2 170.0 151.2 

Life insurance benefits ................................ 62.9 60.1 3.9 4.5 66.8 64.6 

FECA benefits ............................................ 25.9 29.2 7.1 7.7 33.0 36.9 

Unfunded leave .......................................... 10.3 10.3 16.6 16.8 26.9 27.1 

Liability for other benefits ............................ 1.8 1.7 6.4 7.8 8.2 9.5 

 

Total federal employee and veteran 

benefits payable ....................................... 3,084.3 2,890.4 9,727.6 7,292.6 12,811.9 10,183.0 

Note: "N/A" indicates not applicable. 

The government offers its employees retirement and other benefits, as well as health and life insurance. The liabilities 

for these benefits, which include both actuarial amounts and amounts due and payable to beneficiaries and health care 

carriers, apply to current and former civilian and military employees. The actuarial accrued liability represents an estimate of 

the PV of the cost of benefits that have accrued, determined based on future economic and demographic assumptions. 

Actuarial accrued liabilities can vary widely from year to year, due to actuarial gains and losses that result from changes to 

the assumptions and from experience that has differed from prior assumptions. 

OPM administers the largest civilian pension and post-retirement health benefits plans. DOD and VA administer the 

military pension and post-retirement health benefit plans. Other significant pension plans with more than $10.0 billion in 

actuarial accrued liability include those of Foreign Service (State), TVA, and HHS’s Public Health Service Commissioned 

Corps Retirement System. Please refer to the financial statements of the entities listed for additional information regarding 

their pension plans and other benefits. 

In accordance with SFFAS No. 33, Pension, Other Retirement Benefits, and Other Postemployment Benefits: Reporting 

the Gains and Losses from Changes in Assumptions and Selecting Discount Rates and Valuation Dates, entities are required 

to separately present gains and losses from changes in long-term assumptions used to estimate liabilities associated with 

pensions, ORB, and OPEB on the Statement of Net Cost. SFFAS No. 33 also provides a standard for selecting the discount 

rate assumption for PV estimates of federal employee pension, ORB, and OPEB liabilities. The SFFAS No. 33 standard for 

selecting the discount rate assumption requires it be based on a historical average of interest rates on marketable Treasury 

securities consistent with the cash flows being discounted. Additionally, SFFAS No. 33 provides a standard for selecting 

the valuation date for estimates of federal employee pension, ORB, and OPEB liabilities that establishes a consistent method 

for such measurements. This SFFAS No. 33 does not apply to the FECA program. 

To provide a sustainable, justifiable data resource for the affected entities, Treasury developed a model and 

methodology for developing these interest rates in FY 2014. 1

 The model is based on the methodology used to produce the 

HQM yield curve pursuant to the Pension Protection Act of 2006. As of July 2014, Treasury began releasing interest rate 

yield curve data using this new Treasury’s TNC yield curve, which is derived from Treasury notes and bonds. The TNC 

yield curve provides information on Treasury nominal coupon issues and the methodology extrapolates yields beyond 

1 Treasury’s HQM resource is available at: https://home.treasury.gov/data/treasury-coupon-issues-and-corporate-bond-yield-curves/treasury-coupon-issues
 NOTES TO THE FINANCIAL STATEMENTS 108 

30 years through 100 years maturity. The TNC yield curve is used to produce a Treasury spot yield curve (a zero coupon 

curve), which provides the basis for discounting future cash flows. 

In addition to the benefits presented in this note, federal, civilian, and military employees and federal entities contribute 

to the TSP. The TSP is administered by an independent government entity, the FRTIB, which is charged with operating the 

TSP prudently and solely in the interest of the participants and their beneficiaries. Please refer to Note 23—Fiduciary 

Activities for additional information on the TSP. 

Pension Benefits 

 

Change in Pension Benefits 

Civilian Military Total 

(In billions of dollars) 2022 2021 2022 2021 2022 2021 

Actuarial accrued pension liability, 

beginning of fiscal year ............................... 2,361.8 2,214.1 1,933.6 1,799.3 4,295.4 4,013.4 

Pension expense: 

Normal costs ........................................... 55.9 51.7 38.0 38.4 93.9 90.1 

Interest on liability .................................... 64.6 65.6 55.6 57.0 120.2 122.6 

Actuarial (gains)/losses (from experience) . 96.0 46.2 112.9 47.4 208.9 93.6 

Actuarial (gains)/losses (from assumption 

changes) ................................................. 142.9 80.8 376.7 53.9 519.6 134.7 

Other ....................................................... (63.7) - 63.6 - (0.1) - 

 Total pension expense............................ 295.7 244.3 646.8 196.7 942.5 441.0 

Less benefits paid ....................................... (101.5) (96.6) (66.9) (62.4) (168.4) (159.0) 

Actuarial accrued pension liability, end of 

fiscal year .................................................. 2,556.0 2,361.8 2,513.5 1,933.6 5,069.5 4,295.4 

Significant Long-Term Economic Assumptions Used in Determining Pension 

Liability and the Related Expense 

Civilian Military 

2022 2021 2022 2021 

FERS CSRS FERS CSRS 

Rate of interest ................................. 2.90% 2.30% 3.10% 2.40% 2.80% 2.90% 

Rate of inflation ................................ 2.00% 2.00% 1.70% 1.70% 2.30% 1.60% 

Projected salary increases ................ 1.60% 1.60% 1.30% 1.30% 2.30% 2.00% 

Cost of living adjustment ................... 1.80% 2.00% 1.50% 1.70% 2.30% 1.60% 
109 NOTES TO THE FINANCIAL STATEMENTS 

Civilian Employees’ Pension 

OPM administers the largest civilian pension plan, which covers substantially all full-time, permanent civilian federal 

employees. This plan includes two components of defined benefits, the CSRS and the FERS. The basic benefit components 

of the CSRS and the FERS are financed and operated through the CSRDF, a trust fund. CSRDF monies are generated 

primarily from employees’ contributions, federal entity contributions, payments from the General Fund, and interest on 

investments in Treasury securities. As of September 30, 2022, USPS has accrued, but not paid OPM, $18.1 billion in CSRS 

and FERS retirement benefit expenses since 2014. In 2022, USPS made a partial payment of $0.5 billion towards the required 

payment for FERS amortization. In order for USPS to preserve liquidity and to ensure the ability to fulfill its primary 

universal service mission was not placed at undue risk, USPS has not made all of the required payments for FERS or CSRS 

amortization. The cost of each year’s payment, including defaulted payments, along with other benefit program costs, are 

included in USPS’ net cost for that year in the consolidated Statements of Net Cost. The liability is not included on the 

government-wide Balance Sheet due to the USPS liability being eliminated with OPM’s corresponding receivable. 

The civilian pension liability increased by $194.2 billion, primarily due to less favorable than assumed plan experience 

and the declining interest rate assumption. 

Military Employees’ Pensions 

The Military Retirement System consists of a funded, noncontributory, defined benefit plan for military personnel 

(Services of Army, Navy, Air Force, Marine Corps, Space Force, and the USCG) with an entry date prior to January 1, 2018 

and the BRS, generally for military personnel with an entry date on or after January 1, 2018. The defined benefit plan 

includes non-disability retired pay, disability retired pay, survivor annuity programs, Concurrent Retirement and Disability 

Pay, and Combat-Related Special Compensation. The Service Secretaries may approve immediate non-disability retired pay 

at any age with credit of at least 20 years of active duty service. Reserve retirees must be at least 60 years old and have at 

least 20 qualifying years of service before retired pay commences; however, in some cases, the age can be less than 60 if the 

reservist performs certain types of active service. P.L. 110-181 and P.L. 113-291 includes provisions for a three-month 

reduction in the reserve retirement age from age 60 for each aggregate of 90 days of certain active-duty service served in any 

fiscal year after January 28, 2008, or in any two consecutive fiscal years after September 30, 2014. However, in no case may 

the retirement age drop below age 50. There is no vesting of defined benefits before non-disabled retirement. There are 

distinct non-disability benefit formulas related to four populations within the Military Retirement System: Final Pay, High-3, 

Career Status Bonus/Redux, and the BRS enacted in the NDAA for FY 2016, effective January 1, 2018. The BRS is a 

retirement benefit merging aspects of both a defined benefit annuity with a defined contribution account, through the TSP. 

The date an individual enters the military generally determines which retirement system they would fall under and if they 

have the option to select, via a one-time irrevocable election, their retirement system. Military personnel with a start date on 

or after January 1, 2018 are automatically enrolled in BRS. Although all members serving as of December 31, 2017 were 

grandfathered under the prior retirement system, Active Duty, National Guard and Reserve personnel meeting established 

criteria may have opted into BRS during calendar year 2018. Under the BRS, retiring members are given the option to 

receive a portion of their retired pay annuity in the form of a lump sum distribution. For additional information on these 

benefits, see DOD’s Office of Military Compensation website https://militarypay.defense.gov. 

The DOD MRF was established by P.L. 98-94 (currently 10 U.S.C. §1461-1467) and accumulates funds to finance, on 

an accrual basis, the liabilities of DOD military retirement and survivor benefit programs. This fund receives income from 

three sources: monthly normal cost payments from the services to pay for DOD’s portion of the current year’s service cost; 

annual payments from Treasury to amortize the unfunded liability and pay for the increase in the normal cost attributable to 

Concurrent Receipt (certain beneficiaries with combat-related injuries who are receiving payments from VA) per P.L. 108-

136; and investment income. 

The NDAA for FY 2021, §§ 8224-8225 requires the USCG be covered by the MRF no later than the beginning of FY 

2023. For additional information regarding DOD’s USCG actuarial liability, please refer to DOD’s financial statements. 

DOD’s Office of the Actuary calculates the actuarial liability annually using economic and demographic assumptions 

about the future (e.g., mortality and retirement rates). The $579.9 billion increase in the Military Retirement Pension liability 

is primarily attributable to updated actuarial assumptions, experience and the plan amendment related to the USCG. The net 

impact of the updated actuarial assumptions was $376.7 billion. The updated long-term economic assumptions under SFFAS 

No. 33 increased the liability by $319.5 billion and are as follows, comparing FY 2022 to FY 2021, 2.8 percent discount rate 

compared to 2.9 percent, 2.3 percent COLA compared to 1.6 percent, 2.3 percent across the board salary increase compared 

to 2.0 percent. Updated non-economic actuarial assumptions increased the actuarial liability by $57.2 billion. The increase in 

liability of $63.6 billion labeled “other” represents the transfer of the actuarial liability for the USCG from DHS to DOD. 

The VA provides eligible veterans and/or their dependents with pension benefits if the veteran died, is over age 65 or is 

totally disabled, based on annual eligibility reviews. Unlike a traditional pension program, VA pension is only available to 
 NOTES TO THE FINANCIAL STATEMENTS 110 

veterans who meet the financial means test. As such, only the amounts currently due and payable are reflected as a liability 

on VA’s balance sheet, which is consistent with federal accounting standards. No actuarial liability is recognized for the NPV 

of projected future benefit payments. 

Veterans Compensation and Burial Benefits 

 

 Change in Veterans Compensation and Burial Benefits 

Compensation Burial Total 

(In billions of dollars) 2022 2021 2022 2021 2022 2021 

Actuarial accrued liability, beginning of fiscal 

year ........................................................... 4,291.7 3,854.3 10.6 8.8 4,302.3 3,863.1 

Current year expense: 

 Interest on the liability balance .................. 126.6 124.5 0.3 0.3 126.9 124.8 

Prior (and past) service costs from 

program amendments or new programs 

during the period ...................................... 7.0 26.3 - 1.1 7.0 27.4 

Actuarial (gains)/losses (from experience) . 144.6 47.7 (0.4) (0.2) 144.2 47.5 

Actuarial (gains)/losses (from assumption 

changes) ................................................. 1,505.2 349.5 1.5 0.9 1,506.7 350.4 

 Total current year expense ..................... 1,783.4 548.0 1.4 2.1 1,784.8 550.1 

Less benefits paid ....................................... (121.7) (110.6) (0.3) (0.3) (122.0) (110.9) 

Actuarial accrued liability, end of fiscal year .. 5,953.4 4,291.7 11.7 10.6 5,965.1 4,302.3 

Significant Economic Assumptions Used in Determining Veterans Compensation and 

Burial Benefits as of September 30, 2022, and 2021 

2022 2021 

Rate of interest ....................................................................................................... 2.82% 2.95% 

Rate of inflation ...................................................................................................... 2.67% 2.32% 

The government compensates disabled veterans and their survivors. Veterans’ compensation is payable as a disability 

benefit or a survivor’s benefit. Entitlement to compensation depends on the veterans’ disabilities incurred in or aggravated 

during active military service, death while on duty, or death resulting from service-connected disabilities after active duty. 

Eligible veterans who die or are disabled during active military service-related causes, as well as their dependents, and 

dependents of service members who died during active military service, receive compensation benefits. In addition, service 

members who die during active military service and veterans who separated under other than dishonorable conditions are 

provided with a burial flag, headstone/marker, and grave liner for burial in a VA national cemetery or are provided a burial 

flag, headstone/marker and a plot allowance for burial in a private cemetery. These benefits are provided under 38 U.S.C., 

Part 2, §2301-2308, in recognition of a veteran’s military service and are recorded as a liability in the period the requirements 

are met. 

Several significant actuarial assumptions were used in the valuation of compensation and burial benefits to calculate the 

PV of the liability. A liability was recognized for the projected benefit payments to: 1) those beneficiaries, including veterans 

and survivors, currently receiving benefit payments; 2) current veterans who are expected in the future to become 

beneficiaries of the compensation program; and 3) a proportional share of those in active military service as of the valuation 
111 NOTES TO THE FINANCIAL STATEMENTS 

date who are expected to be future veterans and to become beneficiaries of the compensation program. Future benefit 

payments to survivors of those veterans in classes 1, 2, and 3 above are also incorporated into the projection. 

The veterans’ compensation and burial benefits liability is developed on an actuarial basis. It is impacted by interest on 

the liability balance, experience gains or losses, changes in actuarial assumptions, prior service costs, and amounts paid for 

costs included in the liability balance. 

The liability for veterans’ compensation and burial benefits payable is based on an actuarial estimate of future 

compensation and burial payments. The liability increased by $1,662.8 billion in FY 2022 primarily due to: 1) actuarial 

losses from assumption changes; 2) actuarial losses from experience; and 3) interest on the liability balance. The interest on 

liability cost of $126.9 billion is based on the prior year liability balance multiplied by the single weighted average discount 

rate used to compute the liability for veterans’ compensation and burial benefits payable in the prior year. The experience 

cost accounted for $144.2 billion of increase in the liability, and the amounts paid decreased the liability by $122.0 billion.

The $1,506.7 billion is mainly due to increases in other actuarial assumptions, a decrease in the discount rate assumptions, 

and an increase in the COLA rate assumptions. 

The single-equivalent discount rate decreased from 2.95 percent to 2.82 percent as of September 30, 2022, which 

increased the liability by $139.3 billion. The single equivalent COLA rate increased from 2.32 percent as of September 30, 

2021, to 2.67 percent as of September 30, 2022, which increased the liability by $309.7 billion. The long-term COLA rate 

assumption for the September 30, 2021, valuation was based on the average of the last 10 years of monthly Treasury 

Breakeven Inflation Curve rates. The long-term COLA rate assumption for the September 30, 2022, valuation was based on 

the intermediate assumptions published in SSA’s Annual Report of the Board of Trustees of the Federal Old-Age and 

Survivors Insurance and Federal Disability Insurance Trust Funds. VA’s long term COLA rate assumption for the 

compensation benefit is similar to that of the SSA’s intermediate COLA rate assumption. This methodological change to 

developing the COLA assumption increased the liability by an additional $326.2 billion. 

The increase in the liability due to other assumptions was primarily the result of updates to the veterans compensation 

plan participation and benefit level distribution rates, and mortality rates, which together increased the liability by $728.0 

billion. An experience study was performed for the compensation plan participation and benefit level distribution rates, which 

estimate potential veterans and service members who may be eligible to receive an award in the future. The increase in plan 

participation and benefit level distribution rates reflect the impact of various legislation and VA policy changes in the prior

years that expanded eligibility including improved outreach efforts on compensation benefits to legacy Veterans and recently 

separated military members. These assumption rate changes resulted in an increase of $564.2 billion in the compensation 

liability as of September 30, 2022. The veterans mortality rate, which is the probability of death at a given age, were 

developed using more recent data which showed a combination of a decrease in mortality rate and higher disability ratings 

given to a younger population. The updated mortality rates resulted in an increase of $163.8 billion. 

On August 10, 2022, the PACT Act, P.L. 117-168, was signed into law expanding and extending eligibility for VA 

benefits and health care for veterans with toxic exposures and veterans of the Vietnam, Gulf War and Post-9/11 eras. The 

PACT Act is the most significant expansion of benefits for toxic exposed Veterans in more than 30 years. Provisions of the 

PACT Act that directly impact compensation benefits include the addition of over 20 presumptive medical conditions from 

exposures to burn pits and other toxins. VA is currently assessing the effect of this new law to the compensation benefits 

liability and additional data and analysis is warranted to develop a precise estimate in accordance with SFFAS No. 5, 

Accounting for Liabilities of the Federal Government. 
 NOTES TO THE FINANCIAL STATEMENTS 112 

Post-Retirement Health Benefits 

 

Change in Post-Retirement Health Benefits 

Civilian Military Total 

(In billions of dollars) 2022 2021 2022 2021 2022 2021 

Actuarial accrued post-retirement health 

benefits liability, beginning of fiscal year ....... 427.3 418.7 868.7 848.6 1,296.0 1,267.3 

Post-Retirement health benefits 

expense: 

Prior (and past) service costs from plan 

amendments or new plans ........................ (28.3) - - - (28.3) - 

Normal costs ............................................ 21.3 19.8 25.4 25.5 46.7 45.3 

Interest on liability..................................... 13.5 14.0 29.0 28.4 42.5 42.4 

Actuarial (gains)/losses (from experience) .. 0.4 (16.1) (5.6) (40.4) (5.2) (56.5) 

Actuarial (gains)/losses (from assumption 

changes) ................................................. 10.2 7.3 150.2 28.9 160.4 36.2 

 

Total post-retirement health benefits 

expense ................................................ 17.1 25.0 199.0 42.4 216.1 67.4 

Less claims paid ......................................... (17.0) (16.4) (22.7) (22.3) (39.7) (38.7) 

Actuarial accrued post-retirement health 

benefits liability, end of fiscal year ................ 427.4 427.3 1,045.0 868.7 1,472.4 1,296.0 

Significant Long-Term Economic Assumptions Used in Determining 

Post-Retirement Health Benefits and the Related Expense 

Civilian Military 

2022 2021 2022 2021 

Rate of interest ............................................. 3.10% 3.20% 2.90% 3.00% 

Single equivalent medical trend rate .............. 4.50% 4.40% 4.60% 4.11% 

Ultimate medical trend rate ............................ 3.40% 3.20% 4.30% 3.60% 

Civilian Employees’ Post-Retirement Health Benefits 

The post-retirement civilian health benefit liability is an estimate of the government’s future cost of providing postretirement health benefits to current employees and retirees. Although active and retired employees pay insurance premiums 

under the Federal Employee Health Benefits Program, these premiums cover only a portion of the costs. The OPM actuary 

applies economic and demographic assumptions to historical cost information to estimate the liability. 

The USPS was required to make annual prefunding payments to the PSRHB Fund beginning in FY 2007. USPS 

defaulted on these payments from FY 2011 through FY 2021. The amount due in FY 2021 was $5.1 billion, and the total 

amount that USPS owed to the Fund as of September 30, 2021, was $57.0 billion. The Postal Service Reform Act of 2022 

changes the method in which required payments into the PSRHB Fund are calculated and cancelled the payments due from 

USPS. Consequently, the intra-governmental receivable at OPM and the related payable at USPS were written off, which had 

no effect on the respective agencies’ reported net cost in the Statement of Net Cost. 
113 NOTES TO THE FINANCIAL STATEMENTS 

The prior (and past) service costs from plan amendments was a decrease of $28.3 billion. This change is due to a 

reduction in future costs as a result of the Postal Service Reform Act of 2022.

Military Employees’ Post-Retirement Health Benefits 

Military retirees who are not yet eligible for Medicare (and their non-Medicare eligible dependents) are eligible for 

post-retirement medical coverage provided by DOD. Depending on the benefit plan selected, retirees and their eligible 

dependents may receive care from MTF on a space-available basis or from civilian providers through TRICARE. This 

TRICARE coverage is available as Select (a preferred provider health plan that contracts with medical providers to create a 

network of participating providers; member cost-shares are typically higher for services received out-of-network) and Prime 

(a health maintenance plan that limits services to a specific network of medical personnel and facilities and usually by 

requiring referral by a primary-care physician for specialty care; coverage is also available for non-referred and out-ofnetwork care, subject to higher cost-sharing). These post-retirement medical benefits are paid by the DOD Defense Health 

Program on a pay-as-you-go basis. 

Since FY 2002, DOD has provided medical coverage to Medicare-eligible retirees (and their eligible Medicare-eligible 

dependents). This coverage, called TFL, is a Medicare Supplement plan which includes inpatient, outpatient and pharmacy 

coverage. Enrollment in Medicare Part B is required to maintain eligibility in TFL. Retirees with TFL coverage can obtain 

care from MTF on a space-available basis or from civilian providers. 

10 U.S.C., Chapter 56 created the DOD MERHCF, which became operative on October 1, 2002. The purpose of this 

fund is to account for and accumulate funds for the health benefit costs of Medicare-eligible military retirees, and their 

dependents and survivors who are Medicare eligible. The Fund receives revenues from three sources: interest earnings on 

MERHCF assets, Uniformed Services normal cost contributions, and Treasury contributions. The DOD Medicare-Eligible 

Retiree Health Care Board of Actuaries (the MERHCF Board) approves the methods and assumptions used in actuarial 

valuations of the MERHCF for the purpose of calculating the per capita normal cost rates (to fund the annual accrued 

benefits) and determining the unfunded liability amortization payment (Treasury contribution). 

The Secretary of Defense directs the Secretary of the Treasury to make DOD’s normal cost payments. The MERHCF 

pays for medical costs incurred by Medicare-eligible beneficiaries at MTF and civilian providers (including payments to U.S. 

Family Health Plans for grandfathered beneficiaries), plus the costs associated with claims administration. 

DOD’s Office of the Actuary calculates the actuarial liabilities annually using assumptions and experience (e.g., 

mortality and retirement rates, health care costs, medical trend rates, and the discount rate) in accordance with SFFAS No. 

33. Actuarial liabilities are calculated for all DOD retiree medical benefits, including both the benefits funded through the 

MERHCF and the benefits for pre-Medicare retirees who are paid on a pay-as-you-go basis. Military post-retirement health 

and accrued benefits payable increased $176.3 billion. The increase is primarily attributable to changes in assumptions. 

In addition to the health care benefits the federal government provides for civilian and military retirees and their 

dependents, the VA also provides medical care to veterans on an “as available” basis, subject to the limits of the annual 

appropriations. For the FYs 2018 through 2022, the average medical care cost per year was $86.5 billion. 
 NOTES TO THE FINANCIAL STATEMENTS 114 

Veterans Education and Training Benefits 

 

Change in Veterans Education and Training Benefits 

(In billions of dollars) 2022 2021 

Actuarial accrued liability, beginning of fiscal year ..................................................... 151.2 133.1 

Current year expense: 

Prior (and past) service costs from plan amendments or new plans ......................... - 14.3 

Interest on liability ................................................................................................ 3.7 3.6 

Actuarial (gains)/losses (from experience) ............................................................. 7.4 17.4 

Actuarial (gains)/losses (from assumption changes) ............................................... 19.8 (4.1) 

 Total current year expense ................................................................................. 30.9 31.2 

Less benefits paid ................................................................................................... (12.1) (13.1) 

Actuarial accrued liability, end of fiscal year .............................................................. 170.0 151.2 

For eligible Veterans and their dependents, the VA provides four education/retraining type programs: 

x Post 9/11 GI Bill; 

x VR&E; 

x Survivors’ and Dependents’ Educational Assistance; and 

x Montgomery GI Bill-Active Duty. 

Based on the actuarial estimates of future payments, the total liability for the four education and training programs 

increased by $18.8 billion in FY 2022. The $18.8 billion increase is primarily attributable to experience losses and losses 

from other assumption changes. 

 In FY 2022, VA conducted experience studies for the Post 9/11 GI Bill, Survivors’ and Dependents’ Educational 

Assistance, Montgomery GI Bill-Active Duty and VR&E programs, resulted in the liability increase of $19.8 billion from 

assumption changes. 

For additional information regarding actuarial assumptions and the four education and training type programs, please 

refer to VA’s financial statements. 
115 NOTES TO THE FINANCIAL STATEMENTS 

Life Insurance Benefits 

Civilian Employees’ Life Insurance Benefits 

 

Change in Civilian Life Insurance Benefits 

(In billions of dollars) 2022 2021 

Actuarial accrued life insurance benefits liability, beginning of fiscal year .................... 60.1 57.6 

Life insurance benefits expense: 

New entrant expense ........................................................................................... 0.9 0.7 

Interest on liability ................................................................................................ 1.7 1.6 

Actuarial (gains)/losses (from experience) ............................................................. (0.4) (0.3) 

Actuarial (gains)/losses (from assumption changes) ............................................... 1.3 1.2 

 Total life insurance benefits expense .................................................................. 3.5 3.2 

Less costs paid ...................................................................................................... (0.7) (0.7) 

Actuarial accrued life insurance benefits liability, end of fiscal year............................. 62.9 60.1 

Significant Long-Term Economic Assumptions Used in Determining Life 

Insurance Benefits and the Related Expense 

Civilian 

2022 2021 

Rate of interest ....................................................................................................... 2.80% 2.90% 

Rate of increase in salary ........................................................................................ 1.60% 1.30% 

One of the other significant employee benefits is the FEGLI Program. Employee and annuitant contributions and 

interest on investments fund a portion of this liability. The actuarial life insurance liability is the expected PV of future 

benefits to pay to, or on behalf of, existing FEGLI participants, less the expected PV of future contributions to be collected 

from those participants. The OPM actuary uses salary increase and interest rate yield curve assumptions that are generally 

consistent with the pension liability. 

As of September 30, 2022, the total amount of FEGLI insurance in-force is estimated at $766.7 billion ($659.8 billion 

for employees and $106.9 billion for annuitants). 

Veterans’ Life Insurance Benefits 

The largest veterans’ life insurance programs consist of the following: 

x National Service Life Insurance covers policyholders who served during World War II. 

x Veterans’ Special Life Insurance was established in 1951 to meet the insurance needs of veterans who served during 

the Korean Conflict and through the period ending January 1, 1957. 

x Service-Disabled Veterans Insurance program was established in 1951 to meet the insurance needs of veterans who 

received a service-connected disability rating. 

Death benefit liabilities consist of reserves for permanent plan and term policies as well as policy benefits for Veterans 

Mortgage Life Insurance. Disability income and waiver liabilities consist of reserves to fund the monthly payments to 

disabled insureds under the Total Disability Income Provision and the policy premiums waived for qualifying disabled 

veterans. Insurance dividends payable consists of dividends left on deposit with VA and dividends payable to policyholders. 
NOTES TO THE FINANCIAL STATEMENTS 116

Unpaid policy claims consist of insurance claims that are pending at the end of the reporting period, an estimate of claims 

that have been incurred but not yet reported, and disbursements in transit. The veteran’s life insurance liability for future 

policy benefits as of September 30, 2022, and 2021, was $3.9 billion and $4.5 billion, respectively. For additional 

information on veteran’s life insurance liability, please refer to VA’s financial statements.

The VA supervises SGLI and Veterans Group Life Insurance programs that provide life insurance coverage to members

of the uniformed armed services, reservists, and post-Vietnam Veterans as well as their families. VA has entered into a group 

policy with the Prudential Insurance Company of America to administer and provide the insurance payments under these 

programs. All SGLI insureds are automatically covered under the Traumatic Injury Protection program, which provides for 

insurance payments to veterans who suffer a serious traumatic injury in service.

The amount of insurance in-force is the total face amount of life insurance coverage provided by each administered and 

supervised program at the end of the fiscal year. It includes any paid-up additional coverage provided under these policies. 

The supervised programs’ policies and face values are not reflected in VA’s liabilities because the risk of loss on these 

programs is assumed by Prudential and its reinsurers through the terms and conditions of the group policy. As a result, the 

information provided for the supervised programs is for informational purposes only and is unaudited. The face value for 

supervised programs as of September 30, 2022, and 2021, was $1,213.2 billion and $1,219.0 billion, respectively. The face 

value for administered programs as of September 30, 2022, and 2021, was $4.8 billion and $5.3 billion, respectively. 

Federal Employees’ Compensation Act Benefits

Workers’ Compensation Benefits

DOL determines both civilian and military entities’ liabilities for future workers’ compensation benefits for civilian 

federal employees, as mandated by the FECA, for death, disability, medical, and miscellaneous costs for approved 

compensation cases, and a component for incurred, but not reported, claims. Effective March 12, 2021, the ARP, Section 

4016, “Eligibility for Workers’ Compensation Benefits for Federal Employees Diagnosed with COVID-19,” mandated that 

accepted COVID-19 claims (or other accepted claims resulting from a coronavirus pandemic) be paid by the fund and are not 

billable to other federal entities; related administrative costs, including the fair share costs of non-appropriated entities, are to 

be paid by the fund and are not billable. Beginning in FY 2021, the actuarial liability includes claims covered by Section 

4016 of the ARP.

The FECA liability is determined annually using historical claim data and benefit payment patterns related to injury 

years to predict the future payments. The actuarial methodology provides for the effects of inflation and adjusts liability 

estimates to constant dollars by applying wage inflation factors (COLA) and medical inflation factors (CPIM) to the 

calculation of projected benefits. DOL selects the COLA factors and CPIM factors by averaging over five years the COLA 

rates and CPIM rates, respectively. The FY 2022 methodology for averaging the COLA rates used OMB provided rates; the 

FY 2022 PHWKRGRORJ\IRUDYHUDJLQJWKH&3,0UDWHVXVHG20%ဨSURYLGHGUDWHVDQGLQIRUPDWLRQREWDLQHGIURPWKH%XUHDXRI

Labor Statistics public releases for CPI. Using averaging renders estimates that reflect trends over five years instead of 

conditions that exist in one year. 

The COLAs and CPIMs used in the projections for FY 2022 are listed below in the table. 

DOL selects the discount rates by averaging interest rates for the current and prior four years. Using averaging renders

estimates that reflect historical trends over five years instead of conditions that exist in one year. DOL selected the interest

rate assumptions whereby projected annual payments were discounted to PV based on interest rate assumptions on the TNC

yield curve to reflect the average duration of income payments and medical payments. The average durations for income

payments and medical payments were 13.8 years and 10.6 years, respectively. Based on averaging the TNC yield curves for

the current and prior four years, the interest rate assumptions for income payments and medical payments were 2.1 percent

and 2.0 percent, respectively.
117 NOTES TO THE FINANCIAL STATEMENTS 

For the COLAs, CPIMs, average durations, and interest rate assumptions used in the projections for FY 2021, refer to 

the FY 2021 Financial Report. 

Unfunded Leave 

Unfunded leave are the amounts recorded by an employer federal entity for unpaid leave earned that an employee is 

entitled to upon separation and that will be funded by future years’ budgetary resources. The unfunded leave total as of 

September 30, 2022, and 2021, was $26.9 billion and $27.1 billion, respectively. 

Liability for Other Benefits 

Liability for other benefits includes several programs. The largest program is VA’s Community Care Program, with an 

estimated liability of $4.7 billion as of September 30, 2022.