DEPARTMENT OF THE TREASURY

OFFICE OF D.C. PENSIONS

FISCAL YEAR

2023 ANNUAL REPORT

DISTRICT OF COLUMBIA

PENSIONS PROGRAM

 

MESSAGE FROM THE DIRECTOR 

December 2023 

As the Office of D.C. Pensions moved into its 26th year of operation, it 

continued to work collaboratively with all entities associated with the 

District of Columbia Pensions Program to provide high quality service to the 

annuitants and to carry out the Department of the Treasury’s responsibilities 

under the Balanced Budget Act of 1997, as amended (the Act). The Office 

of D.C. Pensions demonstrated successful stewardship of its pension funds, 

effective use of program resources, and the ability to adapt to changing requirements. 

Pursuant to the Act, the Office of D.C. Pensions is responsible for carrying out the Secretary of the 

Treasury's responsibility to fund and administer the District of Columbia Judges' Retirement Plan and 

the federal portion of the District of Columbia Police Officers and Firefighters’, and Teachers’ 

Retirement Plans. As of September 30, 2023, the District of Columbia Judicial Retirement and 

Survivors Annuity Fund, and the District of Columbia Teachers, Police Officers and Firefighters 

Federal Pension Fund held assets totaling $4.3 billion. During FY 2023, $880.2 million in benefit 

payments were processed, the largest dollar amount in program history, for annuitants, beneficiaries, 

and Qualified Domestic Relations Orders (QDROs). Additionally, refunds of employee 

contributions were made upon request to former active employees or their beneficiaries. 

The Office of D.C. Pensions continued to efficiently manage finances while making all benefit payments 

to annuitants on time. A certified independent public accounting firm rendered an unmodified opinion on 

the FY 2023 financial statements of the Office of D.C. Pensions. This was accomplished through 

partnership with the District of Columbia Retirement Board, the Bureau of the Fiscal Service, and other 

Department of the Treasury and District of Columbia entities. The Office of D.C. Pensions continues to 

assess the systems and processes for capturing and consolidating the financial and performance data 

presented within this Annual Report as reliable and complete. 

The Annual Report shows that with support from our service providers and business partners, the 

Office of D.C. Pensions made timely and accurate benefit payments, managed finances and the 

investment portfolio, provided oversight and program management, modernized operations, executed 

an effective quality assurance program, and ensured funding will be available for future payments. 

The Office of D.C. Pensions will continue to strive to obtain management and organizational 

excellence which will only be achieved by collaborating with Department of the Treasury and 

District of Columbia entities. 

On behalf of the Office of D.C. Pensions, I am pleased to present the FY 2023 Annual Report, which 

provides highlights of the program’s significant accomplishments, as well as plans for upcoming 

years. 

Nancy A. Ostrowski, Director 

Office of D.C. Pensions 

Department of the Treasury 
The Office of D.C. Pensions contact information is: 

Address: U.S. Department of the Treasury 

Office of D.C. Pensions 

1500 Pennsylvania Avenue NW 

Washington, DC 20220 

Telephone: (202) 622-0800 

E-mail: DCPENSIONS@treasury.gov 

Website: https://home.treasury.gov/about/offices/management/human-resources-and-chiefhuman-capital-officer/dc-pensions 
 

 

Table of Contents
 

PART 1 MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited) PAGE 

I. Introduction.......................................................................................................................1 

II. Strategic Goals, Objectives, Outcomes, Performances Measures, and Results ................4 

III. Analysis of Systems, Controls, and Legal Compliance ......................................25 

IV. Financial Highlights – Financial Overview ....................................................................26 

PART 2 INDEPENDENT AUDITORS’ REPORT 

Independent Auditors’ Report .........................................................................................31 

PART 3 FINANCIAL STATEMENTS AND NOTES
 

Consolidated Balance Sheets ..........................................................................................39 

Consolidated Statements of Net Cost .............................................................................40 

Consolidated Statements of Changes in Net Position.....................................................41 

Combined Statements of Budgetary Resources ..............................................................42 

Notes to Financial Statements.........................................................................................43 

PART 4 REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) 

Combining Statements of Budgetary Resources.............................................................59 

PART 5 OTHER INFORMATION (Unaudited) 

Consolidating Balance Sheets – By Fund .......................................................................63 

Consolidating Statements of Net Cost – By Fund ..........................................................64 

Consolidating Statements of Changes in Net Position – By Fund..................................65 

Schedule of Pension Expense – By Fund .......................................................................66 

Actuarial Valuation Report FY 2023 (Executive Summary) ..........................................67 
(This page intentionally left blank.) 
PART 1 

MANAGEMENT’S 

DISCUSSION and 

ANALYSIS (Unaudited) 

Management’s Discussion & Analysis (Unaudited) 

MANAGEMENT'S DISCUSSION AND ANALYSIS
 

FISCAL YEAR 2023 (Unaudited)
 

The mission of the Office of D.C. Pensions is to implement the Secretary's responsibilities 

under Title XI of the Balanced Budget Act of 1997, Public Law 105-33 

(111 Stat. 251, 712), as amended.
 

I. Introduction 

A. Statutory Basis and Responsibilities 

Under provisions in Title XI of the Balanced Budget Act of 1997, as amended (the Act1), 

the Secretary of the Treasury (the Secretary) assumed certain responsibilities for a 

specific population of annuitants under the following District of Columbia (District) 

retirement plans: the Police Officers and Firefighters’ Retirement Plan, the Teachers’ 

Retirement Plan, and the Judges’ Retirement Plan. Specifically, the Secretary is 

responsible for administering the retirement benefits earned by District teachers, police 

officers, and firefighters based upon service accrued on or before June 30, 1997, and 

administering the retirement benefits earned by District judges, regardless of when 

service accrued. These benefits are referred to as Federal benefit payments. Benefit 

payments to which an individual is entitled under the District of Columbia Replacement 

Plan (pertaining to police officers, firefighters, and teachers based upon service accrued 

after June 30, 1997) are referred to as District benefit payments. Police officers, 

firefighters, and teachers’ benefit payments based upon service accrued before and after 

June 30, 1997, are the financial responsibility of both the Department of the Treasury 

(Treasury) and the District. Payments resulting from such service are referred to as split 

benefit payments. 

1

There have been six amendments to the Balanced Budget Act of 1997. These include the District of Columbia 

Courts and Justice Technical Corrections Act of 1998, Pub. L. 105-274, 112 Stat. 2419 (Oct. 21, 1998); the 

Technical and Clarifying Amendments Relating to District of Columbia Retirement Funds, Title VIII of Pub. L. 

105-277, 112 Stat. 2681-530 (Oct. 21, 1998); the Law Enforcement Pay Equity Act of 2000, Title IX of Pub. L. 106-

554, 114 Stat. 2763A-303 (Dec. 21, 2000); an Act to Amend the District of Columbia Retirement Protection Act of 

1997, Pub. L. 107-290, 116 Stat. 2051 (Nov. 7, 2002); the District of Columbia Military Retirement Equity Act of 

2003, Pub. L. 108-133, 117 Stat. 1386 (Nov. 22, 2003); and the District of Columbia Retirement Protection 

Improvement Act of 2004, Pub. L. 108-489, 118 Stat. 3966 (Dec. 23, 2004). 

1 
Management’s Discussion & Analysis (Unaudited) 

The Secretary’s responsibilities include: (1) making accurate and timely benefit 

payments; (2) investing fund assets; and (3) funding pension benefits. To carry out these 

responsibilities, Treasury’s Office of D.C. Pensions (the Office) engages in a wide range 

of legal, policy, and operational activities in the areas of benefits administration, 

information technology, financial management, program management, and office 

administration. The Office coordinates with many District entities and business partners 

to administer its responsibilities. 

Since September 26, 2005, the District of Columbia Retirement Board (DCRB) has 

served as the interim benefits administrator for the Police Officers and Firefighters’, and 

Teachers’ Retirement Plans. The Office reimburses DCRB for expenses associated with 

administrating the Federal benefit payments and the Federal portion of the split benefit 

payments. Also, as of that date, the Office assumed benefit administration responsibility 

for the Judges’ Retirement Plan. 

B. Mission and Organizational Structure 

The mission of the Office is to implement the Secretary's responsibilities under Title XI 

of the Balanced Budget Act of 1997, Public Law 105-33 (111 Stat. 251, 712), as 

amended. This includes making timely and accurate benefit payments associated with 

the District of Columbia retirement plans for police officers and firefighters, teachers, and 

judges by managing investments, providing oversight and program management, and 

ensuring funding is available for future payments. 

The Office reports to the Deputy Assistant Secretary for Human Resources and Chief 

Human Capital Officer (DASHR/CHCO), who reports to the Assistant Secretary for 

Management (ASM). The ASM reports through Treasury’s Deputy Secretary to 

Treasury’s Secretary. The Office is led by the Director and has 16 filled positions. The 

Office funds three positions in other Treasury offices performing critical functions to 

accomplish the Office’s mission. All of the positions are funded by the District of 

Columbia Teachers, Police Officers and Firefighters Federal Pension Fund (D.C. Federal 

Pension Fund) and the District of Columbia Judicial Retirement and Survivors Annuity 

Fund (Judicial Retirement Fund). 

The Office fulfills its mission through five key functional areas as described below: 

 Benefits Administration: The Office provides oversight of the benefit administration 

functions performed by DCRB for the Police Officers and Firefighters’, and 

Teachers’ Retirement Plans. The Office is the benefits administrator for the Judges’ 

Retirement Plan. 

 Finance and Resource Administration: The Office provides oversight for financial 

statement reporting and investments in Government Account Series (GAS) securities 

in the federal pension funds. The Office contracts with a third-party enrolled actuary 

to perform an annual actuarial valuation to determine the pension liability of the 

2 
 

Management’s Discussion & Analysis (Unaudited) 

retirement plans and the annual contributions from the Treasury General Fund to the 

D.C. Federal Pension Fund and the Judicial Retirement Fund. 

 Information Technology Systems Administration: The Office operates and maintains 

the System to Administer Retirement (STAR), an automated pension/payroll system, 

in support of benefits administration and annuitant payroll. The Office utilizes the 

STAR Change Control Board (CCB) which acts as the approving authority for all 

STAR requirement changes. 

 Program Management: The Office executes its responsibilities through program 

management activities, which include planning and project management, quality 

management, and risk management. The Office produces, analyzes, and acts upon 

performance management information to continually improve operations. 

 Office Administration: The Office provides management and administrative support 

to ensure operations are effective and efficient. 

In addition to the above functional areas, the Office has a Leadership Team which is 

comprised of the Director, two Senior Program Managers, Assistant Director for Benefits 

Administration, Assistant Director for Finance and Resource Administration, Assistant 

Director for Information Technology Systems Administration, and Assistant Director for 

Office Administration. The Leadership Team focuses on managing program-wide 

initiatives and activities. 

Pursuant to Interagency Agreements (IAA) with the Treasury’s Bureau of the Fiscal 

Service (Fiscal Service), the Administrative Resource Center (ARC) provides financial 

management, annuitant payroll, and information technology support services. The 

financial management services include financial management system platforms, budget 

processing, financial reporting, and investment accounting. Other services include 

investment management and human resources support. Annuitant payroll services 

include STAR payroll processing, debt management, split benefit reconciliation and 

reporting, third party payroll reporting, and mailings. Information technology support 

services include systems administration, hosting for STAR, and security services, which 

includes FISMA compliance. 

The Office closely coordinates with various District of Columbia entities, including 

DCRB and District of Columbia Courts to timely process benefits, make benefit 

payments, perform other benefits administration tasks, and resolve inquiries from 

members and others related to the retirement plans. 

3 
Management’s Discussion & Analysis (Unaudited) 

II. Strategic Goals, Objectives, Outcomes, Performance Measures, 

and Results 

The Office of D.C. Pensions (the Office) has three Strategic Goals that contribute to one 

of the five Department of the Treasury (Treasury) Fiscal Year (FY) 2022-2026 Strategic 

Goals and Objectives. 

The table on the following pages display the Office’s Strategic Goals, Objectives, and 

Outcomes linked to one of Treasury’s FY 2022-2026 Strategic Goals. It also outlines the 

Office’s Performance Measures and Results. 

Additional information about the Office’s FY 2023 results and plans for future years can 

be found in the remaining sections of the Management’s Discussion and Analysis. 

4 
Management's Discussion & Analysis (Unaudited) 

Office of D.C. Pensions Strategic Goals, Objectives, Outcomes, Performance Measures, and Results 

Fiscal Years 2022 - 2026 Fiscal Year 2023 

Treasury Goals and Objectives Office Strategic Goals, Objectives, and Outcomes Office Performance Measures 

and Results Treasury 

Strate2ic Goal 

Treasury 

Strate2ic Objective 

Office 

Stratei!ic Goals 

Office 

Strate2ic Objectives 

Office 

Outcomes 

Modernize 

Treasmy 

Operations 

Better Use of Data Effectively 

Managed 

Finances 

Skilled staff and 

technology are 

available to administer 

benefits 

Benefit payments are 

accurate and timely 

FY 2023 projected monetary enor 

rate for benefit calculations 

Target: 5% or less 

Actual: 5.61% (See footnote 1) 

ST AR is available to users 

Target: 99% or more 

Actual: 99.56% 

FY 2024 investment strategy 

developed timely 

Target: September 25, 2023 

Actual: September 25, 2023 

Pension funds are 

effectively managed 

FY 2023 minimum daily cash 

balance exceeds the minimum 

balance as defined in the FY 2023 

investment strategy 

Target: 100% 

Actual: 100% 

FY 2023 annual contribution from 

General Fund received timely into 

pension funds 

Target: September 27, 2023 

Actual: September 27, 2023 

5
 
Management's Discussion & Analysis (Unaudited) 

Fiscal Years 2022 - 2026 Fiscal Year 2023 

Treasury Goals and Objectives Office Strategic Goals, Objectives, and Outcomes Office Performance Measures 

and Results 

Monthly benefit payments made to 

a1llluitants by the first business day 

of the month 

Target: 100% 

Actual: 100% 

Treasury 

Stratelrlc Goal 

Modernize 

Treasmy 

Operations 

( continued) 

Treasury 

Stratelrlc Objective 

Better Use of Data 

( continued) 

Office 

StratePi.c Goals 

Effectively 

Managed 

Finances 

( continued) 

Office 

Strate!!ic Objectives 

Skilled staff and funds 

are available to 

manage financial 

activities ( continued) 

Office 

Outcomes 

Pension funds are 

effectively managed 

( continued) 

Electronic benefit payments made 

to a1llluitants as of September 2023 

Target: 98.8% 

Actual: 99.0% 

Pension funds meet FY 2023 request for annual 

futme needs contribution from General Fm1d 

prepared timely 

Target: September 21, 2023 

Actual: September 21, 2023 

Customer 

Experience Practices 

Management and 

Organizational 

Excellence 

Skilled staff and 

management tools are 

available 

Program is effectively 

managed 

Risks are reviewed in accordance 

with the schedule outlined in the 

Risk Management Plan 

Target: Quarterly Meetings 

Actual: Qua1terly Meetings 

FY 2023 financial statement audit 

opinion received from a certified 

independent public accounting 

film 

Target: Unmodified opinion 

Actual: Unmodified opinion 

6
 
Management's Discussion & Analysis (Unaudited) 

Fiscal Years 2022 - 2026 Fiscal Year 2023 

Treasury Goals and Objectives Office Strategic Goals, Objectives, and Outcomes Office Performance Measures 

and Results Treasury 

Stratelrlc Goal 

Treasury 

Stratelrlc Objective 

Office 

StratePi.c Goals 

Office 

Strate!!ic Objectives 

Office 

Outcomes 

Modernize 

Treasmy 

Operations 

( continued) 

Customer 

Experience Practices 

( continued) 

Management and 

Organizational 

Excellence 

( continued) 

Skilled staff and 

management tools are 

available ( continued) 

Program is effectively 

managed ( continued) 

FY 2023 Annual Report and 

Financial Statements finalized 

Target: December 15, 2023 

Anticipated: December 15, 2023 

FY 2023 Acturuial Valuation 

Repo1t delivered timely 

Target: September 22, 2023 

Actual: September 22, 2023 

Effective Quality 

Assurance 

Program 

Quality plans are 

operational in each 

area 

Program creates 

continuous 

improvement 

FY 2024 Quality Assurance Plans 

approved by September 29, 2023 

Target: 100% 

Actual: 100% 

Footnotes: 

1) The monetaiy enor rate for FY 2023 showed a slight improvement over the 5.66% monetaiy enor rate from FY 2022 due to training 

provided by the Office and the District of Columbia Retirement Board (DCRB) to address findings. 

7
 
Management’s Discussion & Analysis (Unaudited) 

A. Benefit payments are accurate and timely 

Program Results and Future Focus 

a. Benefits Administration 

Background and Operations 

Benefits administration services are provided by the District of Columbia Retirement Board 

(DCRB), with oversight and support by the Office, to annuitants and beneficiaries in the 

Police Officers and Firefighters’ Retirement Plan and the Teachers’ Retirement Plan. The 

Office provides benefits administration services to annuitants in the Judges’ Retirement Plan. 

General benefit administration operations focused largely on transaction processing and 

customer service activities. On a monthly basis, benefit administration activities included the 

processing of new retirements and/or survivor benefits, identifying individuals no longer 

eligible for benefits, and updating annuitants’ personal and benefits information. In addition 

to focusing on the accuracy and timeliness of transaction processing, the Office and its 

business partners strive to deliver high quality customer service. 

The total annuitant and beneficiary population as of September 30, 2023, is 14,123, which 

includes 5,353 teachers, 8,659 police officers and firefighters, and 111 judges. 

All annuitant payroll files were submitted on time, ensuring timely payment of annuitant 

benefits on the first business day of the month. In FY 2023, a variety of outreach efforts 

continued to ensure that accurate and timely information was provided to annuitants, 

including important messages on earning statements, letters to annuitants about open season 

for health benefits, and other communications about benefit changes and retirement plan 

information. 

Annuitant Payroll Operations 

Monthly benefit payment processing and reconciliation of payroll reports are performed by 

the Bureau of the Fiscal Service (Fiscal Service), Administrative Resource Center (ARC) 

Pension Payroll. ARC Pension Payroll reports the share of Federal and District benefit 

payments as calculated by STAR, which supports the monthly reimbursement to the Office 

from DCRB for District benefit payments. Additionally, ARC Pension Payroll provided mail 

management support to ensure that monthly earnings statements and other annuitant 

communications are distributed in an efficient and timely manner. 

Benefits Administration Quality Program 

During FY 2023, the Office continued to review benefit administration and annuitant payroll 

activities. The Office’s staff focused benefit payment reviews on payment types and data 

points that impacted the actuarial liability, in addition to calculations that have had historically 

8 
 

Management’s Discussion & Analysis (Unaudited) 

high error rates. The Office conducted targeted training and engaged DCRB in discussions to 

improve the quality of work performed by DCRB. 

For annuitant payroll processing functions, the Office reviews preliminary and final payroll 

statistics, off-cycle payment requests, and third-party payroll reporting. In addition to other 

reports, each month the Office monitors death audit verification, checks which have not been 

cashed for an extended period of time, payment reclamations, and returned mail. 

Benefit Administration Activities and Projects 

During FY 2023, the Office continued to collaborate with DCRB to focus on key benefit 

activities and data integrity. For FY 2024, the Office and DCRB will collaborate on new 

training initiatives and updating benefits administration procedures. 

Summary Plan Descriptions 

The Summary Plan Descriptions (SPD) are designed to provide retirement plan members 

accurate and easy to understand information about the retirement plans. The SPDs are 

updated quinquennially. In FY 2023, the Office worked with DCRB to coordinate the review 

of the updated SPDs for the Teachers’ Retirement Plan and the Police Officers and 

Firefighters’ Retirement Plan. The Judges’ Retirement Plan SPD is scheduled to be updated 

in calendar year 2024. 

Former District Employees Retirement Contributions 

Former District employees who have not requested a refund or retirement benefits and have 

retirement contributions remaining in the retirement funds are entitled to a deferred retirement 

benefit or a refund of the contributions. Former employees with service totaling less than five 

years are entitled to a refund. Former employees with service totaling five years or greater are 

entitled to a deferred retirement benefit. During FY 2023, the Office completed work with 

DCRB to analyze the data to identify the former District employees who may have been 

entitled to a deferred benefit or refund of retirement contributions. In FY 2024, the Office and 

DCRB will collaborate to determine the necessary next steps. 

Collective Bargaining Agreements 

In FY 2023, the District of Columbia approved collective bargaining agreements for police 

officers, firefighters, and teachers that included retroactive pay increases. The Office 

coordinated with DCRB on STAR enhancements to implement the retroactive pay increases. 

The benefit recalculations for eligible annuitants began in FY 2023 and are expected to 

conclude in FY 2024. 

9 
Management’s Discussion & Analysis (Unaudited) 

STAR Annuitant Self-Service 

In FY 2021, the Office collaborated with DCRB to identify the requirements to implement 

Annuitant Self-Service functionality in STAR. The self-service functionality allows 

annuitants an opportunity to view and edit certain information. Allowing annuitants to view 

and, in some cases, make changes to their information makes it easier and more convenient 

and reduces the level of effort required for DCRB and the Office. Self-Service was 

introduced to a pilot population in FY 2021 and rolled out to the full annuitant population in 

FY 2022. 

For FY 2023, the Office and DCRB began planning for enhancements to add capabilities to 

the Annuitant Self-Service functionality to allow annuitants to retrieve Form 1099-R 

beginning with the 2023 tax year. In FY 2024, the Office will identify requirements for future 

enhancements including the ability to access Self Service for Health Insurance Open 

Enrollment. 

Training and Resources 

During FY 2023, the Office delivered training to DCRB Benefits Administration staff on 

STAR functionality and Federal benefit calculations. In FY 2024, the Office will continue 

assessing training requirements to ensure skills and knowledge exists to effectively manage 

and execute benefits administration activities. 

In FY 2022, the Office began evaluating replacements for the User Productivity Kit (UPK), 

which is the repository for help documentation in STAR. In FY 2023, the Office continued to 

evaluate replacements for the UPK and decided to defer a decision until FY 2025 due to 

pending security certifications for selected solution. 

Data Tool 

In FY 2022, the Office began development of a data tool to assist with the review and 

reconciliation of the participant data used to prepare the actuarial valuation. The data tool will 

provide a consistent, repeatable process for preparing the participant data and enable the 

Office to eliminate some manual processes. The Office began validation of the data tool in 

FY 2023 and will complete validation and implementation of the data tool in FY 2024. 

Debt and Due Process Tracking Tool 

In FY 2023, the Office implemented a Debt and Due Process Tracking Tool (DDPTT) in 

STAR to track and report debt and benefit due process cases. The DDPTT provides a single 

platform for managing and tracking debt and benefit due process case information from 

initiation through resolution. The Office will work with DCRB and ARC Pension Payroll to 

enhance the capabilities of the DDPTT in FY 2024. 

10 
Management’s Discussion & Analysis (Unaudited) 

b. System to Administer Retirement 

Background 

The System to Administer Retirement (STAR) is a pension/payroll system developed by the 

Office in cooperation with the District. STAR supports the end-to-end business processes for 

retirement, streamlines the administration and payment of pension benefits to annuitants, and 

enhances customer service. STAR enables retirement analysts to quickly access information 

and provide annuitants with real-time customer service. In addition to processing retirements, 

STAR calculates the Federal and District share of benefit payments. 

STAR is based on Oracle/PeopleSoft’s “commercial off-the-shelf” (COTS) software for 

human resources, benefits administration, pensions, and payroll administration. STAR was 

initially deployed in December 2002 and fully functional in November 2007. Since that time, 

the COTS software has continually been updated with the latest versions and many new 

features have been added to support the benefits administration and ARC Pension Payroll 

teams. 

STAR Technical Production Support and Hosting 

System hosting and technical production support for STAR is performed by Fiscal Service, 

Information Security Services (ISS). Since September 2003, ISS staff members have 

provided PaaS (Platform-as-a-service) and production support services for STAR. A 

supplemental support contract is also in place to provide assistance to ISS in both operations 

and maintenance activities. 

The Office plans to transition system hosting for STAR from Fiscal Service on-premise 

computing services to the Treasury’s Cloud computing services (TCloud) provided by 

Treasury’s Office of the Chief Information Officer (OCIO). During FY 2024, the Office will 

collaborate with OCIO to establish STAR infrastructure in TCloud and prepare for transition 

during early FY 2025. The transition to TCloud computing will provide services including 

servers, storage, databases, networking, software, analytics, and intelligence over the Internet 

(“the cloud”) to offer faster innovation, flexible resources, and economies of scale versus 

on-premise dedicated computing services. 

STAR System Security 

The Security Assessment and Accreditation (SA&A) is a process that is made up of a full 

assessment and annual assessment that are conducted to ensure federal systems adhere to 

established security requirements. A full security assessment determines a systems’ 

Authorization to Operate (ATO). It is required every three years or when a security-relevant 

change occurs which constitutes a ‘significant change’ necessitating a new ATO. An annual 

security assessment is required every year in-between the full assessment to ensure federal 

systems remain in compliance with established security requirements. In FY 2023, as a part 

of the SA&A process, the Office conducted an annual security assessment of the STAR 

11 
Management’s Discussion & Analysis (Unaudited) 

system to ensure it remains in compliance with all relevant security requirements and to renew 

its Authorization to Operate (ATO) granted in FY 2021. 

There were 49 vulnerabilities identified during the annual assessment. Of the 49 

vulnerabilities: one vulnerability was risk accepted due to its operational and user impact; six 

vulnerabilities have been mitigated - two of which were closed due to a difference in policy 

between Departmental Offices and Fiscal Service and the remaining four were fixed. The 

mitigation of the remaining 42 vulnerabilities are dependent on a department-wide operational 

vulnerability related to the interpretation of NIST Special Publication 800-53 Revision 5 

controls. The next full security assessment will be conducted in FY 2024. 

STAR security management adheres to the Federal Information Security Modernization Act 

of 2014 (FISMA) calendar year which starts July 1 and ends June 30. As required by 

National Institute of Standards and Technology (NIST), Security and Privacy Controls for 

Information Systems and Organizations (NIST 800-53 Rev. 4), the Office conducts an annual 

contingency test. The purpose of the FY 2023 test was to validate the ability to fully support 

benefit and payroll processing in the STAR Contingency environment. In August 2023, the 

Office attempted to conduct its annual contingency test. However, due to outdated 

configuration settings in STAR Contingency, the Office was unable to complete the test. 

Once the configuration settings were updated, the Office successfully executed the September 

off-cycle payroll process in the STAR Contingency environment. Additionally, reports and 

documentation from the payroll process were readily available in STAR Production following 

the test, further validating the integrity of STAR backup data. 

Information Technology Systems Administration Quality Program 

During FY 2023, the Office continued to review system administration activities and user 

accounts. The quality plan tracks system availability, number and type of open production 

trouble tickets, and completion time of trouble tickets. As part of the quality review, user 

accounts were reviewed semi-annually to ensure that users have the least amount of access 

privileges necessary to perform their duties. The semi-annual reviews were used by the 

Office to manage resources, maintain system security, and track the quality of STAR 

production support and hosting services. Additionally, in FY 2023 the Office continued the 

monthly active account verification reviews to ensure departing employee accounts were 

locked/terminated in a timely manner. All of these quality efforts will continue to be 

conducted in FY 2024. 

STAR Highlights and Projects 

The Office has continued to maintain the system’s operational integrity and looked for 

opportunities to make positive system and customer experience enhancements. 

In FY 2023, the Office made the following enhancements to STAR: 

 Implemented the Debt and Due Process Tracking Tool; 

12 
Management’s Discussion & Analysis (Unaudited) 

 Began the planning for enhancements to add capabilities to the Annuitant Self-Service 

functionality, including Form 1099-R retrieval and Health Insurance Open Enrollment; 

 Began the planning for a new STAR user training/help platform with implementation to 

begin in FY 2025; and 

 Began enhancements to the performance reporting information currently collected from 

STAR by implementing additional data analytics capabilities provided as part of 

PeopleSoft.

 In FY 2024, the Office will be working on the following changes to STAR: 

 Full implementation of the Self-Service Form 1099-R retrieval enhancement and continue 

development of the Health Insurance Open Enrollment enhancement; 

 Enhance the Debt and Due Process Tracking Tool; and 

 Establish STAR infrastructure in TCloud and prepare for transition during early FY 2025. 

STAR Enhanced Electronic Reporting 

In FY 2023, the Office commenced a new project, the STAR Enhanced Electronic Reporting 

(SEER.) SEER will leverage the FY 2022 PeopleTools update, the STAR Payment Review 

Tracking Tool, and the STAR Debt and Due Process Tracking Tool enhancements to 

automate the collection and reporting of performance metrics available within STAR. SEER 

will present the performance metrics, eliminating the manual collection and quality review of 

the current collection process. This effort will resume in FY 2025 after the transition to 

TCloud is completed. 

B. Pension Funds are effectively invested, managed, and meet future needs 

Program Results and Future Focus 

a.	 Pension Funds 

Pursuant to the Balanced Budget Act of 1997, as amended (the Act) (as amended by Public 

Law 105-277) and pursuant to the District of Columbia Retirement Protection Improvement 

Act of 2004, Public Law 108-489, the Office administers Federal benefit payments through 

two funds: 

 The District of Columbia Teachers, Police Officers and Firefighters Federal Pension 

Fund (D.C. Federal Pension Fund) makes Federal benefit payments and pays necessary 

administrative expenses for the Police Officers and Firefighters’, and Teachers’ 

Retirement Plans. The D.C. Federal Pension Fund is not a typical pension fund in that it 

13 
 

Management’s Discussion & Analysis (Unaudited) 

does not receive employee and employer contributions. The sources of funding for the 

D.C. Federal Pension Fund are: 

	 An annual federal payment from the Treasury General Fund which amortizes the 

original unfunded liability and any additional liabilities identified in annual actuarial 

valuations; and 

	 Interest earned on investments. 

Total assets for the D.C. Federal Pension Fund as of September 30, 2023, are $4.1 billion. 

 The District of Columbia Judicial Retirement and Survivors Annuity Fund (Judicial 

Retirement Fund) accumulates funds to finance Federal benefit payments and necessary 

administrative expenses of the Judges’ Retirement Plan. The sources of funding for the 

Judicial Retirement Fund are: 

	 An annual federal payment from the Treasury General Fund which amortizes the 

original unfunded liability and any additional liabilities identified in annual actuarial 

valuations; 

 Interest earned on investments; and
 

 Judges’ employee contributions.
 

Total assets for the Judicial Retirement Fund as of September 30, 2023, are $206.4 million. 

b.	 Fund Deposits 

Warrants 

As authorized by the Act, the D.C. Federal Pension Fund and the Judicial Retirement Fund 

receive annual payments from the Treasury General Fund to cover administrative expenses for 

the year and amortize the unfunded liabilities of the retirement programs assumed by the 

Federal Government over 30 years, the annual net experience gains or losses over 10 years, 

and any annual changes in actuarial liabilities over 20 years. The annual payment to the 

Judicial Retirement Fund also includes amounts necessary to fund the normal cost of the 

retirement program. 

In accordance with the Act, the annual payments to the D.C. Federal Pension Fund and the 

Judicial Retirement Fund are calculated by an enrolled actuary. These funds are requested in 

September each year and invested upon receipt in Government Account Series (GAS) nonmarketable Treasury securities and bonds, with maturities and par amounts consistent with the 

expected payment dates and payout amounts of the pension liabilities. 

A major component of the annual payments is the 30-year payment established in 1997 to 

amortize the unfunded liabilities of the retirement programs assumed by the Federal 

Government. There are four years remaining of these 30-year payments of $348.6 million for 

14 
$3.5 

15

Management's Discussion & Analysis (Unaudited) 

the D.C. Federal Pension Fund and $2.1 million for the Judicial Retirement Fund after which 

the original unfunded liabilities will be fully amortized. 

Interest 

The amount of Interest Payments (deposits) in the table below reflects three sources of 

interest: interest earned on GAS long-te1m securities, interest earned on overnight securities, 

and interest earned through the amo1tization of discounts. In the table below, the Interest 

Earned (recognized) reflects the Interest Payments collected less the amo1tization of 

premiums and discounts from GAS securities where the Rate of Return is calculated by 

dividing interest earned from GAS securities by the average par value of investments in GAS 

securities. 

The FY 2023 and FY 2022 annual interest as of September 30 from the pension funds are 

summarized in the following tables: 

FY 2023 Annual Interest 

(in Millions) 

Office of D.C. Pensions' Funds Interest Interest Rate of Payments Earned Return (deoosits) (recoe:nized) 

District of Columbia Federal Pension Fund $88.3 $77.5 2.04% 

District of Columbia Judicial Retirement and $4.1 $4.1 2.18% Survivors Annuity Fund 

Totals $92.4 $81.6 

FY 2022 Annual Interest 

(in Millions) 

Office ofD.C. Pensions' Funds Interest Interest Rate of Payments Earned Return (deposits) (recoe:nized) 

District of Columbia Federal Pension Fund $73.6 $56.6 1.56% 

District of Columbia Judicial Retirement and $3.6 Survivors Annuity Fund 1.92% 

Totals $77.2 $60.1 

Year-to-year differences in the Interest Earned (recognized) and Rates of Return are driven 

primarily by the interest rates for available GAS non-marketable Treasmy securities available 

at the time investments are placed. 
Management’s Discussion & Analysis (Unaudited) 

Judges’ Employee Contributions 

Active judges are required to contribute 3.5 percent of salary to the Judicial Retirement Fund 

to pay for part of the cost of their retirement benefits. Active judges who elect a survivor 

annuity contribute an additional 3.5 percent of salary. 

District Benefit Payments (Advances) 

Treasury pays District benefit payments under the Police Officers and Firefighters’ and 

Teachers’ Retirement Plans from the D.C. Federal Pension Fund. DCRB makes an advance 

payment to the D.C. Federal Pension Fund prior to the last business day of the month for 

benefit payments made by Treasury on behalf of the District. 

The District’s share of benefit payments continues to increase year over year as the number of 

annuitants with service after June 30, 1997, increases. 

Post-1987 D.C. Health & Life Insurance Premium Payments (Advances) 

Treasury pays the employer share of Post-1987 D.C. health and life insurance premiums on 

behalf of the District from the D.C. Federal Pension Fund. The District makes an advanced 

payment to the D.C. Federal Pension Fund prior to the last business day of the month for the 

premiums that are paid by Treasury on behalf of the District. 

The District’s employer share of Post-1987 D.C. health and life insurance premiums continues 

to increase year over year as the number of retirees who were hired after October 1, 1987, 

increases. 

STAR Administrative Expense Reimbursements 

The Office and DCRB have developed a methodology for allocating STAR administrative 

costs incurred by the Office when administering Federal and District benefit payments. The 

methodology takes into consideration the number of 100 percent Federal annuitants, 

100 percent District annuitants, and split annuitants. On a quarterly basis, the Office requests 

reimbursement for STAR administrative expenses from DCRB. 

16 
$35.9 

$0.3 

$0.7 

Management's Discussion & Analysis (Unaudited) 

Summaiy of Fund Deposits 

The table below reflects the fund deposits to the D.C. Federal Pension Fund and the Judicial 

Retirement Flmd as of September 30: 

Office of D.C. Pensions' Funds 

(in Millions) 

Fund Type of Deposit FY 2023 FY2022 $ Change 

Wanant $608.7 $539.5 $69.2 

Interest $88.3 $73.6 $14.7 

District Benefit Payments $311.2 $275.3 District of (Advances) Columbia 

Post-1987 D.C. Health & Life $30.1 $26.3 $3.8 Federal Pension 

Insurance Employer Premium Fund 

Payments (Advances) 

ST AR Administrative Expense $2.9 $2.6 

Reimbursements 

District of Wanant $22.5 $19.4 $3.1 

Columbia Interest $4.1 $3.6 $0.5 

Judicial 

Retirement and 

Survivors 

Annuity Fund 

Judges' Employee Contributions $0.8 $0.1 

Warrant $631.2 $558.9 $72.3 

Interest $92.4 $77.2 $15.2 

Totals Judges' Employee $0.8 $0.7 $0.1 

Contributions 

Advances and $344.2 $304.2 $40.0 

Reimbursements 

c. Debt Collection 

The ARC Pension Payroll manages the debt collection and prevention activities for the Office. 

During FY 2023, the Office collaborated with ARC Pension Payroll, Office of General 

COlmsel, and DCRB to pursue debt prevention and collection effo1ts. The Office recovered 

approximately $1.5 million after notification of annuitant deaths. In addition, the Office also 

collected $131.8 thousand through offsets, lump sum payments, or installment payments. 

17
 
Management's Discussion & Analysis (Unaudited) 

d. Intragovernmental Investments 

The Office's investment policy establishes a balance of availability of fi.mds between shortte1111 and long-te1111 obligations. As required by the Act, amOlmts received in the D.C. Federal 

Pension Flmd and the Judicial Retirement Flmd which are not needed for sho11-te1111 

obligations are invested in non-marketable securities. The Fiscal Service invests fi.mds based 

on an investment guidance issued by the Office. The Office follows a "ladder approach" in 

investing securities sufficient to meet the long-term obligations for benefit payments and 

administrative expenses projected by annual actuarial valuations. By the end of FY 2023, the 

Office held securities with maturity dates extended 8 to 13 years. The Office's excess cash 

will be invested in one-day certificates. 

futragovernmental investments are valued at cost, and, if applicable, adjusted for lmamo11ized 

premiums and discOlmts. The premiums and discOlmts are recognized as adjustments to 

interest income, utilizing the effective interest method. 

The table below reflects the intra governmental investments breakdown as of September 30 for 

the two most recent years: 

Intragovernmental Investments 

Office of D.C. Pensions' Funds (in l\ilillions) 

FY 2023 FY 2022 $ Change 

District of Columbia Federal Pe11sio11 Fund $4,115.9 $3,998.5 $117.4 

Distr

ict of Columbia Judicial Retireme1lf and 

Survivors Ammitv Fund $205.7 $196.4 $9.3 

Totals $4,321.6 $4,194.9 $126.7 

e. Payments 

Federal Benefit Payments 

Treasmy pays all federal benefit payments lmder the Police Officers and Firefighters' 

Retirement Plan, Teachers' Retirement Plan, and Judges' Retirement Plan. 

18 
Management's Discussion & Analysis (Unaudited) 

The table below summarizes the Federal benefit payments as of September 30: 

Federal Benefit Payments 

(in Millions) Office of D.C. Pensions' Funds 

FY 2023 FY2022 $ Change 

District of Columbia Federal Pension Fund $554.8 $538.8 $16.0 

District of Columbia Judicial Retirement and $17.3 $15.8 $1.5 Survivors Annuity Fund 

Totals $572.1 $554.6 $17.5 

Refunds of Employee Contributions 

DCRB processes refunds of contributions for active police officers, firefighters, and teachers, 

and later requests reimbursement from the Office for the Federal po1tion of those refund 

payments. The Office also processes refunds of contributions for judges when requested. 

Refunds from the D.C. Federal Pension Fund were $4.3, and $53.6 thousand for the fiscal 

years ending September 30, 2023, and 2022, respectively. Refunds from the Judicial 

Retirement Fund were $452.1 thousand for the fiscal year ending September 30, 2023. 

There were no refunds from the Judicial Retirement Fund for the fiscal year ending 

September 30, 2022. 

Benefit Administration Expense Reimbursements to DCRB 

The Office reimburses DCRB quaiterly for administrative expenses incuned in administering 

Federal benefit payments. The Office and DCRB have developed a methodology for 

allocating between Office and DCRB the costs incurred by DCRB while administering 

Federal and District benefit payments and entered into a cost shai·ing agreement for 

reimbursement of FY 2023 actual expenses. The methodology takes into consideration: 

(1) the number of active employees, 100 percent Federal annuitants, 100 percent District 

annuitants, and split annuitants; (2) the estimated DCRB resources needed to support these 

populations; (3) the number of employees throughout DCRB who are dedicated to support the 

benefits administration; and (4) the level of eff01t associated with processing Federal benefit 

payments. Treasmy reimbursed DCRB approximately $3.5 million for FY 2023 expenses 

associated with administering Federal benefit payments, which included amounts estimated 

for fomth quarter expenses. In FY 2022, Treasmy reimbursed DCRB $3.3 million for 

administrative expenses. 

Administrative Expenses 

The Office funds administrative expenses from the D.C. Federal Pension Fund and the 

Judicial Retirement Fund. When administrative expenses related to activities that benefit all 

19 
Management’s Discussion & Analysis (Unaudited) 

of the retirement programs occur, expenses are usually allocated 99 percent to the 

D.C. Federal Pension Fund and one percent to the Judicial Retirement Fund for majority of 

contracts and interagency agreements. The remaining administrative expenses such as Office 

staff salaries and benefits, are allocated at 95 percent to the D.C. Federal Pension Fund and 

five percent to the Judicial Retirement Fund. The allocation percentages are based on the 

number of annuitants covered by each fund. When expenses benefit only annuitants in the 

D.C. Federal Pension Fund or the Judicial Retirement Fund, or when a different allocation is 

clearly appropriate, expenses are charged accordingly. 

The Office’s major administrative expenses consisted of DCRB benefit administration 

(discussed above), the Office’s staff salaries, and contractors engaged to provide IT system 

support. Administrative expenses for the D.C. Federal Pension Fund were $22.2, and 

$21.5 million, for the fiscal years ending September 30, 2023, and 2022, respectively. 

Administrative expenses for the Judicial Retirement Fund were $0.6, and $0.6 million, for the 

fiscal years ending September 30, 2023, and 2022, respectively. 

In FY 2023, the Office was again subject to the Sequestration under the Bipartisan Budget Act 

of 2015 (Public Law 114-74) which modified the caps on defense and nondefense funding for 

Fiscal Year 2018 that were established by the Budget Control Act of 2011. The Office of 

Management and Budget (OMB) issued a report to the Congress on the Joint Committee 

Reductions for Fiscal Year 2018. OMB prepared the report consistent with the requirements 

of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), as amended. 

The report provided calculations of the amounts by which FY 2018 direct spending is required 

by section 251A of BBEDCA to be reduced and listed the required reductions for each nonexempt budget account with direct spending. 

Based on the reports, the Office identified the D.C. Federal Pension Fund and the Judicial 

Retirement Fund as budget authority subject to sequestration. Although sequestration 

reductions had no impact on annuitants’ payments, the Office absorbed these reductions in 

FY 2023 in administrative expenses by managing the timing of approved hiring actions, 

monitoring the funding of contract actions, and planned projects. 

Sequestration impact on administrative expenses for the D.C. Federal Pension Fund were 

$1.4 million for fiscal years ending September 30, 2023, and 2022. Sequestration impact on 

administrative expenses for the Judicial Retirement Fund were $0.1 million for fiscal years 

ending September 30, 2023, and 2022. 

Unless language within the Sequestration Transparency Act of 2012 is changed by Congress, 

the Office will continue to be subject to sequestration reductions until 2031 per the 

Infrastructure Investment and Jobs Act 2022 (Public Law 117-58 Division I, Sec. 90001), and 

will comply with implementation guidance issued by OMB and the Department of the 

Treasury. 

20 
Management’s Discussion & Analysis (Unaudited) 

Prompt Payment Act and Electronic Invoice Payments 

The Prompt Payment Act was enacted to ensure that suppliers doing business with the Federal 

Government are paid by the government in a timely manner. The Office paid 100% of the 64 

invoice payments by electronic funds transfer and incurred no Prompt Pay Act interest 

expense. 

f. Financial Operations 

Accounting and Financial Reporting Support 

Accounting and financial reporting processes are performed by Fiscal Service ARC. ARC 

Accounting uses Oracle Federal Financial (Oracle) as a core financial management system to 

record and process financial transaction. Transaction processing consists of a full range of 

accounting transactions necessary to maintain a complete general ledger, including budgetary 

transactions. The Office’s transactions are entered into Oracle, both manually and via custom 

interfaces, from ancillary systems. Accounting entries that are recorded in the Oracle 

accounting system are supported by Treasury Financial Manual (TFM) to ensure compliance 

with standard general ledger reporting requirements. ARC Accounting uses OneStream to 

prepare the Office’s financial statements and provide data analytics functionality improving 

management’s visibility and controls. ARC Accounting provides a report writer package 

called Oracle Business Intelligence (OBI), which allows the Office to generate accounting 

reports. 

During FY 2023, the Office collaborated with ARC to implement the oneARC portal used to 

process miscellaneous obligations, related payments, and other account payable commercial 

requests. These types of requests were previously accomplished by email using manual 

forms. The oneARC portal has streamlined processes, enabled workflow, and provided an 

electronic trail of requests. The Office also worked together with ARC and federal trading 

partners to process interagency agreements and transaction using G-Invoicing. In FY 2024, 

the Office will work with ARC to replace the OMB Max collaboration tool with a USDA 

workflow solution. The Office also plans to investigate options for developing automated 

analytical reports. 

g. Actuarial Valuation 

In FY 2023, the Office’s actuarial contractor performed the annual actuarial valuation for the 

Office, as required by the Act. The annual actuarial valuation is used to determine the 

pension liability and FY 2024 funding requirement of the retirement plans administered by the 

Office. The actuarial valuation was based on assets and liabilities as of the end of FY 2023. 

The actuarial accrued liability was determined using the demographic assumptions from the 

FY 2019 Actuarial Experience Study and economic assumptions in accordance with 

Statement of Federal Financial Accounting Standards (SFFAS) No. 33, Pensions, Other 

Retirement Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses 

from Changes in Assumptions and Selecting Discount Rates and Valuation Dates. 

21 
Management's Discussion & Analysis (Unaudited) 

The Federal Government's total liability for Federal benefit payments for the Police Officers 

and Firefighters' Retirement Plan, Teachers' Retirement Plan, and Judges' Retirement Plan is 

summarized in the table below for the two most recent years. 

Actuarial Accrued Liability 

Office of D.C. Pensions' Funds (in Millions) 

FY 2023 FY 2022 $ Chane:e 

District of Columbia Federal Pension Fund $8,500.7 $8,212.2 $288.5 

District of Columbia Judicial Retirement and $328.0 $295.8 $32.2 Survivors Annuity Fund 

Total Actuarial Accrued Liability $8,828.7 $8,508.0 $320.7 

The year-to-year differences in the actuarial accrned liability are driven primarily by actuarial 

gains and losses associated with demographic experience and changes in economic 

assumptions. 

Other key results from the Actuarial Valuation Report can be found on page 67 of this Annual 

Repo1i. 

C. Program is effectively managed and creates continuous improvement 

Program Results and Future Focus 

a. Program Planning 

In FY 2023, the Office Leadership Team composed of the Office Director, the Assistant 

Director for Benefits Administration, Assistant Director for Finance and Resomce 

Administration, Assistant Director for Infonnation Technology Systems Administration, and 

the two Senior Program Managers focused on major deliverables in addition to execution and 

impact of cross-functional/organizational activities. The Office strives to achieve greater 

efficiency, effectiveness, and quality for continuous improvement of the D.C Pensions 

Program. Meetings between the Office and DCRB will continue to take place in FY 2024 to 

ensure alignment of major operational activities and timely creation of and adherence to 

memoranda of understanding, service level agreements (SLA), and quality plans. 

b. Multi-Year Planning 

In FY 2023, the Office Leadership Team continued to focus attention on major functional 

areas and activities assessed as having longer te1m and multi-entity impact. The Office 

Leadership Team tracked the perfo1mance indicators to ensure that the Office made progress 

toward achieving the results contemplated in the Office's FY 2023-2025 Multi-Year Plan. In 

FY 2024, the Office Leadership Team will review the Multi-Year Plan to dete1mine if the 

22
 
Management’s Discussion & Analysis (Unaudited) 

contemplated results were achieved and to update the Multi-Year Plan to ensure the 

appropriate emphasis is reflected to achieve optimal results. 

c. Knowledge Management 

In FY 2023, the Office began focusing on knowledge management which included knowledge 

transfer, training, and developing standard operating procedures. The Office transferred 

knowledge amongst staff through one-on-one meetings, recurring meetings, and sharing of 

information via written correspondence. Additionally, the Office developed and conducted 

various trainings for staff, participated in webinars presented by Fiscal Service, and 

participated in external training presented by private vendors. The Office also developed 

standard operating procedures to ensure effective and efficient standards in work products and 

activities. 

In FY 2024, the Office will continue assessing knowledge management to ensure skills and 

knowledge exists to effectively manage and execute the goals and objectives of the Office. 

d. Service Level Agreements 

The Office has annual SLAs in place with Fiscal Service ARC for the STAR administration 

and hosting, and annuitant payroll operations. In FY 2023, the SLAs were reviewed and 

revised to more accurately define responsibilities, required services and reporting 

requirements for service providers, and to ensure high quality service to annuitants. 

In FY 2023, the Office collaborated with DCRB to review and update the SLA to ensure a 

comprehensive view of service requirements for benefit administration. The updated SLA 

covers FY 2024 and FY 2025. 

e. Office of D.C. Pensions Program Performance Reporting 

In FY 2023, the Office tracked, collected, and reported performance data to continue to 

promote transparency, and improve decision making using the performance measurement 

reporting tool. The performance measures were reported and reviewed during the Office’s 

monthly status meeting. The performance data was utilized to make improvements in 

program management areas, such as operational planning and resource needs assessments. 

In FY 2024, the Office will continue to track, collect, and report performance data. 

f. Records Management Project 

In FY 2023, the Office conducted various assessments and prepared a records management 

strategy with supporting technology requirements. This included a “roadmap” that defines 

major milestones for implementing a records management solution and maintaining future 

federal records in the Office. In FY 2023, the Office conducted a physical and electronic 

records inventory. In FY 2024, the Office will complete the inventories and execute a records 

management strategy to build a comprehensive Records Management Program. 

23 
Management’s Discussion & Analysis (Unaudited) 

g. Risk Management Program 

The Office emphasizes risk management through its Risk Management Program that was 

recently revised to align with the Treasury’s Enterprise Risk Management (ERM) Playbook. The 

Office has taken a proactive approach of developing and nurturing a risk-aware culture as well 

as incorporating ERM into decision-making to support the responsibilities of making accurate and 

timely benefit payments, investing fund assets, and funding pension benefits. The Office also 

maintains a Fraud Mitigation Activities list that outlines internal control activities for 

identifying and mitigating fraud risks specifically. In FY 2024, the Office plans to develop 

and incorporate a Fraud Risk Management Framework as an appendix to its Risk 

Management Plan to expand upon the use of activities outlined in the Fraud Mitigation 

Activities list. 

The Office meets its strategic goal of Effectively Managed Finances using the Risk 

Management Program to assist management with monitoring stated outcomes. These 

outcomes include “Pension funds are effectively managed” and “Pension funds meet future 

needs” for both the D.C. Federal Pension Fund and the Judicial Retirement Fund. Risks 

associated with these outcomes have been evaluated and categorized as low. 

h. Internal Control Program 

In FY 2023, in accordance with requirements outlined in OMB Circular’s A-123, the Office’s 

Senior Assessment Team (SAT), with the support of a contractor, tested, documented, and 

reported on the Office’s internal controls. The Office used the various guidance documents 

published by Treasury’s Office of the Deputy Chief Financial Officer (ODCFO) to execute 

the OMB Circular A-123 requirements. The results of the OMB Circular A-123 activities 

supported management’s assessment that the Office’s internal controls are operating 

effectively and as intended. The Office submitted an unmodified statement of assurance for 

FY 2023. 

However, the FY 2023 consolidated financial statement audit reported a repeat finding from 

FY 2020 which was a significant deficiency related to review of the IT audit logs. The Fiscal 

Service continued to update its database logging capabilities as part of its overall enterprise 

logging initiative. In FY 2024, the Office will continue to work closely with the Fiscal 

Service and anticipates that the Fiscal Service’s database branch will be able to produce the 

necessary database reports by the end of the first quarter in FY 2024. 

With contractor assistance engaged in planning, scheduling, facilitating, and coordinating the 

activities, the Office is positioned to sustain an effective internal controls program that will 

comply with Treasury’s ODCFO FY 2024 guidance. 

i. Financial Statement Audit Opinion 

KPMG LLP (KPMG), an independent public accounting firm, rendered an unmodified 

opinion on the Office’s FY 2023 consolidated financial statements. KPMG noted no material 

24 
Management’s Discussion & Analysis (Unaudited) 

weakness in the Office internal controls over financial reporting. Also, results of KPMG’s 

tests of compliance with laws and regulations disclosed no instances of noncompliance or 

other matters that require reporting under Government Auditing Standards or OMB Bulletin 

No. 24-01, Audit Requirements for Federal Financial Statements. 

III. Analysis of Systems, Controls, and Legal Compliance 

The Office of D.C. Pensions (the Office) is responsible for establishing and maintaining 

effective internal control over financial reporting and has made a conscious effort to meet the 

internal controls requirements of the Federal Managers’ Financial Integrity Act (FMFIA), the 

Federal Financial Management Improvement Act (FFMIA), Office of Management and 

Budget (OMB) Circular A-123, Management’s Responsibility for Enterprise Risk 

Management and Internal Control, and the Government Accountability Office’s Standards for 

Internal Control in the Federal Government. The Office is operating in accordance with the 

procedures and standards prescribed by the Comptroller General and OMB guidelines. 

The systems of management control for the Office are designed to ensure that: 

 Programs achieve their intended results; 

 Resources are used consistent with overall mission; 

 Programs and resources are free from waste, fraud, and mismanagement; 

 Laws and regulations are followed; 

 Controls are sufficient to minimize any improper or erroneous payments; 

 Performance information is reliable; 

 System security is in compliance with all relevant requirements; 

 Continuity of operations planning in critical areas is sufficient to reduce risk to reasonable 

levels; 

 Financial management systems are in compliance with Federal financial systems 

requirements, (i.e., FMFIA Section 4 and FFMIA); 

 Complete and accurate data is reported on USASpending.gov; and 

 Controls and policies are in place to prevent fraud and inappropriate use of government 

charge cards. 

For all the Office’s responsibilities, unmodified assurance is provided herein that the above 

listed management control objectives, taken as a whole, were achieved by our organization 

during FY 2023. In addition, the Office provided reasonable assurance that, as of 

September 30, 2023, the Office is in substantial conformance with the federal financial 

management systems requirements of Section 4 of the FMFIA, except for the significant 

deficiency related to the IT controls over the review of the System to Administer Retirement 

(STAR) audit logs. 

The Office’s management is responsible for establishing and maintaining adequate internal 

control over financial reporting, which includes safeguarding of assets and compliance with 

laws and regulations. The Office conducted the required Treasury assessment of the 

25 
Management’s Discussion & Analysis (Unaudited) 

effectiveness of its internal controls over financial reporting in accordance with 

OMB Circular A-123. Based on the results of this assessment, the Office can provide 

unmodified assurance that its internal control over financial reporting as of 

September 30, 2023, was operating effectively. No material weaknesses were found in the 

design or operation of the internal control over financial reporting. In addition, the Office is 

committed to maintaining effective internal control, as demonstrated by the following actions: 

 Although the Office is not a Chief Financial Officer Act agency, the Office’s financial 

statements are pursuant to the Chief Financial Officers Act, as amended, including: 

a) information revealed in preparing the financial statements, b) auditors reports on the 

financial statements, and c) internal controls and compliance with laws and regulations 

and other materials related to preparing financial statements. 

 Annual performance plans, reviews, and reports pursuant to the Government Performance 

Results Act, which include analysis and evaluation of performance measures. 

 The development, tracking, and closure of corrective actions identified in the Financial 

Statement Audit and OMB Circular A-123 Assessment. 

 Internal management and program reviews conducted for the purpose of assessing 

management controls. 

 Reviews of financial systems for requirements compliance in conjunction with 

OMB Circular A-123 and FFMIA. 

 Reviews of systems, applications, and contingency plans conducted pursuant to the 

Computer Security Act of 1987 and OMB Circular A-130, Management of Federal 

Information Resources. 

 Annual assessments, reviews, and reporting performed in compliance with the Payment 

Integrity Information Act (PIIA). 

 Reviews and reporting in compliance with the Federal Information Security Management 

Act (FISMA). 

The Office continues to make improvement in maintaining effective internal control over 

financial reporting and is committed to monitoring and improving its internal controls 

throughout the entire office. 

IV. Financial Highlights – Financial Overview 

The consolidated financial statements have been prepared to report the financial position and 

results of operations of the Office of D.C. Pensions (the Office), pursuant to the requirements 

of the 31 U.S.C. 3515 (b). The consolidated financial statements have been prepared from the 

books and records of the Office in accordance with U.S. generally accepted accounting 

principles for federal entities and the formats prescribed by the Office of Management and 

Budget. Reports used to monitor and control budgetary resources are prepared from the same 

records. Users of the consolidated financial statements are advised that the statements are for 

a component of the U.S. Government. 

26 
$(5.0) 

Management's Discussion & Analysis (Unaudited) 

Om key financial perfo1mance as of and for the fiscal year ending September 30, 2023, 

compared to September 30, 2022, is presented in the table below. 

Summary Financial Information (in Millions) 

FY2023 FY2022 $ Change % Change 

Total Assets $4,346.4 $4,219.2 $127.2 3.01% 

Total Liabilities $8,861.1 $8,537.3 $323.8 3.79% 

Total Net Position $(4,514.6) $(4,318.1) $(196.5) 4.55% 

Total Net Cost of Operations $828.0 $964.8 $(136.8) -14.18% 

Total Budgetary Resources $1,595.1 $1,462.0 $133.1 9.10% 

Agency Outlays, Net $495.3 $500.3 -1.00%

The Offices' financial perfo1mance as of and for the fiscal year ending September 30, 2023, 

reflects the activities around the primaiy mission of the Office, implementing the Secreta1y's 

responsibilities UI1der the Act to make timely and accmate benefit payments associated with 

the District of Collllllbia retirement plans for police officers and firefighters, teachers, and 

judges by managing investments, providing oversight and program management, and ensming 

funding is available for future payments. The info1mation below provides a summaiy of 

significant trends for each line item in the table above. 

Total Assets of $4,346.4 million as of September 30, 2023, principally consist of investments 

in Treasmy secmities. The increase in total assets at the end of FY 2023 over the prior year is 

primai·ily due to a net increase of $126.7 million in investments in Treasury secmities. The 

increase in total assets is primai·ily due to pmchases of new investments offset by premillllls, 

discoUI1ts, and amortization. 

Total Liabilities of $8,861.1 million as of September 30, 2023, principally consist of Actuai·ial 

Pension Liability, and the related Accrned Pension Benefits Payable. The increase in 

liabilities at the end of FY 2023 over the prior year is primarily due to pension expenses offset 

by pension benefits paid and accrned. 

Total Net Position of $(4,514.6) million as of September 30, 2023, represents the combined 

total of the Offices' cumulative results of operations. The decrease in Total Net Position over 

the prior year is primarily due to a $126.7 increase in investments in Treasmy secmities offset 

by a $320.6 million increase in Actuarial Pension Liability, and the related Accrned Pension 

Benefits Payable. 

Total Net Cost of Operations represents the Total Program Costs less Total Eained Revenues 

for Net Program Costs Before Loss from Actuarial Assumption Changes plus Loss on 

Actuarial Assumption Changes. The decrease of $136.8 million in Total Net Cost of 

Operations primarily stems from a decrease of $14.9 million in Pension Expense before 

27
 
Management’s Discussion & Analysis (Unaudited) 

Actuarial Assumption Changes, an increase of $21.4 million in Interest Earned, and a 

$100.6 million decrease in Loss on Actuarial Assumption Changes. 

Total Budgetary Resources of $1,595.1 million increased by $133.1 million primarily due to a 

$87.8 million increase in Appropriations, a $40.0 million increase in Spending Authority from 

Offsetting Collections, and a $5.2 million increase in Unobligated Balance from Prior Year 

Budget Authority. 

Agency Outlays, Net of $495.3 million were slightly lower primarily due to increase in 

Outlays by $89.0 million offset by a $94.0 million increase in Distributed Offsetting Receipts. 

The increase of $89.0 million in outlays were primarily the result of an increase in Warrants 

paid for $72.3 million and federal benefits paid and accrued for $16.0 million. The increase 

of $94.0 million in distributed offsetting receipts is primarily due to a $72.3 million increase 

in Warrants received and a $21.2 million increase in interest and other investment receipts. 

28 
PART 2

INDEPENDENT 

AUDITORS’ 

REPORT 

KPMG LLP, a Delaware limited liability partnership and a member firm of 

the KPMG global organization of independent member firms affiliated with 

KPMG International Limited, a private English company limited by guarantee. 

31
 

KPMG LLP

Suite 12000

1801 K Street, NW

Washington, DC 20006

Independent Auditors’ Report 

Deputy Inspector General, U.S. Department of the Treasury 

Director, Office of D.C. Pensions: 

Report on the Audit of the Consolidated Financial Statements 

Opinion 

We have audited the consolidated financial statements of the Department of the Treasury’s Office of D.C. 

Pensions (ODCP), which comprise the consolidated balance sheets as of September 30, 2023 and 2022, and 

the related consolidated statements of net costs, and changes in net position, and combined statements of 

budgetary resources for the years then ended, and the related notes to the consolidated financial statements. 

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the 

financial position of the ODCP as of September 30, 2023 and 2022, and its net costs, changes in net position, 

and budgetary resources for the years then ended in accordance with U.S. generally accepted accounting 

principles. 

Basis for Opinion 

We conducted our audits in accordance with auditing standards generally accepted in the United States of 

America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards, 

issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Bulletin 

No. 24-01, Audit Requirements for Federal Financial Statements. Our responsibilities under those standards 

and OMB Bulletin No. 24-01 are further described in the Auditors’ Responsibilities for the Audit of the 

Consolidated Financial Statements section of our report. We are required to be independent of the ODCP and 

to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our 

audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 

our audit opinion. 

Other Matter - Interactive Data 

Management has elected to reference to information on websites or other forms of interactive data outside the 

Annual Report to provide additional information for the users of its consolidated financial statements. Such 

information is not a required part of the consolidated financial statements or supplementary information 

required by the Federal Accounting Standards Advisory Board. The information on these websites or the other 

interactive data has not been subjected to any of our auditing procedures, and accordingly we do not express 

an opinion or provide any assurance on it. 

Responsibilities of Management for the Consolidated Financial Statements 

Management is responsible for the preparation and fair presentation of the consolidated financial statements in 

accordance with U.S. generally accepted accounting principles, and for the design, implementation, and 

maintenance of internal control relevant to the preparation and fair presentation of consolidated financial 

statements that are free from material misstatement, whether due to fraud or error. 
32
 

Auditors’
 Responsibilities for the Audit of the Consolidated Financial Statements 

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a 

whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
	report that 

includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and 

therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing 

Standards, and OMB Bulletin No. 24-01 will always detect a material misstatement when it exists. The risk of 

not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud 

may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, 

they would influence the judgment made by a reasonable user based on the consolidated financial statements. 

In performing an audit in accordance with GAAS, Government Auditing Standards, and OMB Bulletin No. 

24-01, we: 

• Exercise professional judgment and maintain professional skepticism throughout the audit. 

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether 

due to fraud or error, and design and perform audit procedures responsive to those risks. Such 

procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the 

consolidated financial statements. 

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that 

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 

effectiveness of the ODCP’s internal control. Accordingly, no such opinion is expressed. 

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant 

accounting estimates made by management, as well as evaluate the overall presentation of the 

consolidated financial statements. 

We are required to communicate with those charged with governance regarding, among other matters, the 

planned scope and timing of the audit, significant audit findings, and certain internal control related matters that 

we identified during the audit. 

Required Supplementary Information 

U.S. generally accepted accounting principles require that the information in the Management’s Discussion and 

Analysis and Required Supplementary Information sections be presented to supplement the basic consolidated 

financial statements. Such information is the responsibility of management and, although not a part of the basic 

consolidated financial statements, is required by the Federal Accounting Standards Advisory Board who 

considers it to be an essential part of financial reporting for placing the basic consolidated financial statements 

in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the 

required supplementary information in accordance with GAAS, which consisted of inquiries of management 

about the methods of preparing the information and comparing the information for consistency with 

management’s responses to our inquiries, the basic consolidated financial statements, and other knowledge we 

obtained during our audits of the basic consolidated financial statements. We do not express an opinion or 

provide any assurance on the information because the limited procedures do not provide us with sufficient 

evidence to express an opinion or provide any assurance. 

Other Information 

Management is responsible for the other information included in the Annual Report. The other information 

comprises the Message from the Director and the Other Information section but does not include the 

consolidated financial statements and our auditors’ report thereon. Our opinion on the consolidated financial 

statements does not cover the other information, and we do not express an opinion or any form of assurance 

thereon. 
33
 

In connection with our audit of the consolidated financial statements, our responsibility is to read the other 

information and consider whether a material inconsistency exists between the other information and the 

consolidated financial statements, or the other information otherwise appears to be materially misstated. If, 

based on the work performed, we conclude that an uncorrected material misstatement of the other information 

exists, we are required to describe it in our report. 

Report on Internal Control Over Financial Reporting 

In planning and performing our audit of the consolidated financial statements as of and for the year ended 

September 30, 2023, we considered the ODCP’s internal control over financial reporting (internal control) as a 

basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing 

our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the 

effectiveness of the ODCP’s internal control. Accordingly, we do not express an opinion on the effectiveness of 

the ODCP’s internal control. We did not test all internal controls relevant to operating objectives as broadly 

defined by the Federal Managers’ Financial Integrity Act of 1982. 

A deficiency in internal control exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, 

misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in 

internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial 

statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a 

deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet 

important enough to merit attention by those charged with governance. 

Our consideration of internal control was for the limited purpose described in the first paragraph of this section 

and was not designed to identify all deficiencies in internal control that might be material weaknesses or 

significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not 

identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we 

consider to be material weaknesses. We identified a certain deficiency in internal control, described in the 

accompanying Schedule of Findings as an item that we consider to be a significant deficiency. 

Report on Compliance and Other Matters 

As part of obtaining reasonable assurance about whether the ODCP’s consolidated financial statements as of 

and for the year ended September 30, 2023 are free from material misstatement, we performed tests of its 

compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with 

which could have a direct and material effect on the financial statements. However, providing an opinion on 

compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an 

opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to 

be reported under Government Auditing Standards or OMB Bulletin No. 24-01. 

ODCP’s Response to Findings

Government Auditing Standards requires the auditor to perform limited procedures on the ODCP's response to 

the findings identified in our audit and described in the accompanying Schedule of Findings. The ODCP’s 

response was not subjected to the other auditing procedures applied in the audit of the consolidated financial 

statements and, accordingly, we express no opinion on the response. 
34
 

Purpose of the Reporting Required by Government Auditing Standards 

The purpose of the communication described in the Report on Internal Control Over Financial Reporting and 

the Report on Compliance and Other Matters sections is solely to describe the scope of our testing of internal 

control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 

ODCP’s internal control or compliance. Accordingly, this communication is not suitable for any other purpose. 

Washington, D.C. 

December 7, 2023 
Schedule of Findings 

General Information Technology (IT) Controls over the System to Administer Retirement (STAR) 

During fiscal year 2023, a prior year deficiency continued to exist because ODCP had not fully implemented a 

corrective action plan. ODCP’s general IT controls over the review of STAR audit logs were not properly 

designed to maintain evidence that an independent individual reviewed and actioned, as necessary, activity on 

the audit logs for the database layer. In prior years, this resulted because management did not design the 

entity’s STAR to respond to the entity’s objectives and risks. The prior year deficiency continues to exist 

because ODCP and their service provider, the Department of Treasury’s Bureau of Fiscal Service, have not 

fully implemented the corrective action plan, due to the timing of enterprise-wide audit logging remediation 

efforts and competing priorities. 

The audit logging deficiency poses a risk that inappropriate activity within STAR is not investigated and 

resolved. 

The relevant criteria are the Government Accountability Office’s Standards for Internal Control in the Federal 

Government, dated September 2014, and National Institute of Standards and Technology Special Publication 

800-53, Revision 4, Security and Privacy Controls for Federal Information Systems and Organizations. 

Recommendation: 

We recommend that ODCP management enhance existing policies and procedures to document a process for 

reviewing, investigating, and resolving unusual or suspicious activity identified during the audit log review, as 

well as maintaining evidence of such review, investigation, and resolution. 

ODCP’s Response:

The Office of D.C. Pensions’ service provider at the Bureau of the Fiscal Service (Fiscal Service) is currently 

implementing an enterprise-wide logging solution, which is necessary for remediation of the database audit 

logging deficiency. Fiscal Service plans to complete their final phase of the logging solution by the end of 

calendar year 2023. ODCP will continue to work with Fiscal Service on the policies and procedures surrounding 

database audit log monitoring once the full capabilities of the enterprise-wide logging solution have been 

realized. 

35
 
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36 
PART 3

FINANCIAL 

STATEMENTS 

and NOTES 

 

 

 

 

 

 

Department of the Treasury
 

Office of D.C. Pensions 

Consolidated Balance Sheets 

As of September 30, 2023 and September 30, 2022
 

(in thousands)
 

2023 2022 

Assets: 

Intragovernmental 

Fund Balance with Treasury (Note 2) $ 307 $ 527 

Investments, Net 

Intragovernmental Investments (Note 3) 4,321,641 4,194,954 

Interest Receivable 21,481 21,688 

Total Intragovernmental 4,343,429 4,217,169 

 Other than Intragovernmental 

Accounts Receivable, Net (Note 4) 2,995 2,028 

Total Other than Intragovernmental 2,995 2,028 

Total Assets $ 4,346,424 $ 4,219,197 

Liabilities: 

Intragovernmental 

Accounts Payable $ 179 $ 115 

Other Liabilities 58 57 

Total Intragovernmental 237 172

 Other than Intragovernmental 

Accounts Payable 1,719 1,837 

Advances from Others 29,940 26,770 

Other Liabilities 

Accrued Pension Benefits Payable 48,284 46,978 

Actuarial Pension Liability (Note 6) 8,780,338 8,461,013 

Accrued Payroll and Benefits 555 561 

Total Other than Intragovernmental 8,860,836 8,537,159 

Total Liabilities $ 8,861,073 $ 8,537,331 

Net Position: 

Cumulative Results of Operations – Funds 

from Other than Dedicated Collections $ (4,514,649) $ (4,318,134) 

Total Net Position $ (4,514,649) $ (4,318,134) 

Total Liabilities and Net Position $ 4,346,424 $ 4,219,197 

The accompanying notes are an integral part of these financial statements. 

39 
Department of the Treasury 

Office of D.C. Pensions 

Consolidated Statements of Net Cost 

For the Years Ended September 30, 2023 and September 30, 2022 

(in thousands) 

2023 2022 

Program Costs 

 Administrative Expenses (Note 5) $ 22,793 $ 22,138 

District Benefit Payments and Employer Share of 

DC Health and Life Plans 338,109 297,820 

Pension Expense before Actuarial Assumption 

Changes (Note 6) 443,213 458,143 

Total Program Costs 804,115 778,101 

Less: Earned Revenues 

Reimbursable Income 341,056 300,401 

Interest Earned 81,575 60,152 

Employee Contributions 784 679 

Total Earned Revenues 423,415 361,232 

Net Program Costs Before Loss from Actuarial Assumption 

Changes 380,700 416,869 

Loss on Actuarial Assumption Changes, Net (Note 6) 447,333 547,978 

Net Cost of Operations $ 828,033 $ 964,847 

The accompanying notes are an integral part of these financial statements. 

40 
 

 

 

Department of the Treasury 

Office of D.C. Pensions 

Consolidated Statements of Changes in Net Position 

For the Years Ended September 30, 2023 and September 30, 2022 

(in thousands) 

2023 2022 

Unexpended Appropriations: 

Beginning Balance $ - $ -

Appropriations Received 631,175 558,934 

Appropriations Used (631,175) (558,934) 

Net Change in Unexpended Appropriations - -

Total Unexpended Appropriations – Ending Balance - -

Cumulative Results of Operations: 

Beginning Balance $ (4,318,134) $ (3,912,432) 

Appropriations Used 631,175 558,934 

Imputed Financing 343 211 

Net Cost of Operations (828,033) (964,847) 

Net Change in Cumulative Results of Operations (196,515) (405,702) 

Total Cumulative Results of Operations – 

Ending Balance $ (4,514,649) $ (4,318,134) 

Net Position $ (4,514,649) $ (4,318,134) 

The accompanying notes are an integral part of these financial statements. 

41 
Department of the Treasury 

Office of D.C. Pensions 

Combined Statements of Budgetary Resources 

For the Years Ended September 30, 2023 and September 30, 2022 

(in thousands) 

Budgetary Resources: 

Unobligated Balance from Prior Year Budget Authority, Net 

(Discretionary and Mandatory) (Note 8) 

Appropriations (Discretionary and Mandatory) 

Spending Authority from Offsetting Collections 

Total Budgetary Resources 

2023 

$ 29,282 

1,221,579 

344,225 

$ 1,595,086 

$ 

$ 

2022 

24,043 

1,133,757 

304,238 

1,462,038 

Status of Budgetary Resources: 

New Obligations and Upward Adjustments 

Unobligated Balance Exempt from Apportionment, 

End of Year 

Total Status of Budgetary Resources 

$ 1,565,146 

29,940 

$ 1,595,086 

$ 

$ 

1,435,268 

26,770 

1,462,038 

Outlays, Net: 

Outlays, Net (Discretionary and Mandatory) 

Distributed Offsetting Receipts 

Agency Outlays, Net (Discretionary and Mandatory) 

$ 1,218,449 

(723,119) 

$ 495,330 

$ 

$ 

1,129,464 

(629,149) 

500,315 

The accompanying notes are an integral part of these financial statements. 

42 
Department of the Treasury 

Office of D.C. Pensions 

Notes to Financial Statements 

September 30, 2023 and September 30, 2022 

1) Summary of Significant Accounting Policies 

a.	 Reporting Entity 

Under provisions in Title XI of the Balanced Budget Act of 1997, Public Law 105-33 

(111 Stat. 251, 712), as amended (the Act), the Secretary of the Treasury (the Secretary) 

assumed certain responsibilities for a specific population of annuitants under the following 

District of Columbia (District) retirement plans: the Police Officers and Firefighters’ 

Retirement Plan, the Teachers’ Retirement Plan and the Judges’ Retirement Plan. 

Specifically, the Secretary is responsible for administering the retirement benefits earned by 

District teachers, police officers and firefighters based upon service accrued prior to 

July 1, 1997, and retirement benefits earned by District judges, regardless of when service 

accrued. 

The Office of D.C. Pensions (the Office) is responsible for and maintains two pension funds, 

which are the District of Columbia Teachers, Police Officers and Firefighters Federal 

Pension Fund (the D.C. Federal Pension Fund – 20X5511) and the District of Columbia 

Judicial Retirement and Survivors Annuity Fund (the Judicial Retirement Fund – 20X8212). 

The Office has permanent and indefinite appropriations to cover the Accrued Pension 

Benefits Payable, the Actuarial Pension Liability, and costs to administer the retirement 

plans. 

District of Columbia Teachers, Police Officers and Firefighters Federal Pension Fund 

Pursuant to the District of Columbia Retirement Protection Improvement Act of 2004, Public 

Law 108-489, Treasury established the District of Columbia Teachers, Police Officers and 

Firefighters Federal Pension Fund (the D.C. Federal Pension Fund – 20X5511). Effective 

October 1, 2004, the assets and liabilities of the District of Columbia Federal Pension 

Liability Trust Fund (the Trust Fund - 20X8230) and the Federal Supplemental District of 

Columbia Pension Fund (the Supplemental Fund – 20X5500) were transferred to the 

D.C. Federal Pension Fund. The D.C. Federal Pension Fund is used for the accumulation of 

funds to finance obligations of the Federal Government for benefits and necessary 

administrative expenses for the Police Officers and Firefighters’ and Teachers’ Retirement 

Plans under the provisions of the Act. 

The D.C. Federal Pension Fund consists of the following: 

 Amounts deposited from the proceeds of assets transferred from the Trust Fund and the 

Supplemental Fund, which included the proceeds of assets transferred to the Department 

43 
of the Treasury (Treasury) from the District of Columbia Retirement Board (DCRB) 

pursuant to the Act; 

 Amounts deposited from the General Fund of the Treasury; 

 Income earned on the investments held in the D.C. Federal Pension Fund; 

 Reimbursement from DCRB for the District’s share of annuitant benefits paid from the 

D.C. Federal Pension Fund; 

 Reimbursement from the District for the District’s employer share of Post-1987 

D.C. health and life insurance premiums; and 

 Reimbursement from DCRB for the Office’s actual expenses incurred in support of 

administering District benefit payments. 

The portion of the D.C. Federal Pension Fund that is not needed to meet the level of current 

Federal benefit payments, refunds, and net administrative expenses is invested in nonmarketable Government Account Series (GAS) securities issued by the Bureau of the Fiscal 

Service (Fiscal Service). Investments are made in securities with maturities suitable to the 

needs of the D.C. Federal Pension Fund. 

By the end of each fiscal year, the Act requires the Secretary to pay into the D.C. Federal 

Pension Fund (from the General Fund of the Treasury) an annual amortization amount and, 

beginning in FY 2009, the covered administrative expenses for the year. The annual 

amortization amount, as determined by an enrolled actuary, is the amount necessary to 

amortize the original unfunded liabilities of the retirement programs assumed by the Federal 

Government over 30 years, the net experience gains or losses over 10 years, and any other 

changes in actuarial liability over 20 years. The amounts paid into the D.C. Federal Pension 

Fund during FY 2023 and FY 2022 were $608.7 million and $539.5 million, respectively, 

which are included in Appropriations Received on the Consolidated Statements of Changes 

in Net Position and Appropriations in the Combined Statements of Budgetary Resources. 

District of Columbia Judicial Retirement and Survivors Annuity Fund 

Pursuant to the Act, Treasury established the District of Columbia Judicial Retirement and 

Survivors Annuity Fund (the Judicial Retirement Fund – 20X8212). 

The Judicial Retirement Fund is used for the accumulation of funds to finance obligations of 

the Federal Government for benefits and necessary administrative expenses of the Judges’ 

Retirement Plan under the provisions of the Act. 

The Judicial Retirement Fund consists of the following: 

 Amounts deposited from the proceeds of assets transferred to Treasury from DCRB 

pursuant to the Act; 

 Amounts deposited from the General Fund of the Treasury; 

 Income earned on the investments held in the Judicial Retirement Fund; and 

 Employee contributions to the Judicial Retirement Fund. 

44 
The portion of the Fund that is not needed to meet the level of current benefit payments, 

refunds and administrative expenses is invested in GAS securities. Investments are made in 

securities with maturities suitable to the needs of the Judicial Retirement Fund. 

By the end of each fiscal year, the Act requires the Secretary to pay into the Judicial 

Retirement Fund (from the General Fund of the Treasury) an amount equal to the normal cost 

for the year, an annual amortization amount, and the covered administrative expenses for the 

year. The annual amortization amount, as determined by an enrolled actuary, is the amount 

necessary to amortize the original unfunded liability of the retirement program assumed by 

the Federal Government over 30 years, the net experience gains or losses over 10 years, and 

any other changes in actuarial liability over 20 years. The annual payment to the Judicial 

Retirement Fund also includes an amount necessary to fund the normal cost of the retirement 

program not covered by employee contributions. The amounts paid into the Judicial 

Retirement Fund during FY 2023 and FY 2022 were $22.5 million and $19.4 million, 

respectively, which are included in Appropriations Received on the Consolidated Statements 

of Changes in Net Position and Appropriations in the Combined Statements of Budgetary 

Resources. 

b. Basis of Accounting and Presentation 

The Office is presenting Financial Statements that consist of the Consolidated Balance Sheet, 

the Consolidated Statement of Net Cost, the Consolidated Statement of Changes in Net 

Position, the Combined Statement of Budgetary Resources, and the related notes. The Notes 

to the Financial Statements consist of a summary of significant accounting policies and other 

relevant explanatory information. The Consolidated Financial Statements have been 

prepared from the accounting records of the Office in accordance with United States 

generally accepted accounting principles for federal entities. Accounting principles generally 

accepted for federal entities are the standards prescribed by the Federal Accounting 

Standards Advisory Board (FASAB). FASAB is designated by the American Institute of 

Certified Public Accountants as the official accounting standards-setting body for the Federal 

Government. 

The Consolidated Financial Statements present balances and activities of the D.C. Federal 

Pension Fund and the Judicial Retirement Fund. There were no transactions between the 

Funds that require elimination during consolidation. 

c. Fund Balance with Treasury 

Fund Balance with Treasury represents appropriated funds from which the Office is 

authorized to make expenditures and pay liabilities resulting from operational activity. 

d. Intragovernmental Investments, Net 

Pursuant to the Act and Section 130 of Division A of Public Law 105-277 (1998), the 

Secretary invests the assets of the D.C. Federal Pension Fund and the Judicial Retirement 

Fund in GAS, market-based (“MK”) securities — special non-marketable Treasury securities 

45 
that mirror the prices of marketable securities with similar terms, issued and redeemed by 

Fiscal Service. The Office follows Treasury's investment policy guidelines and determines 

whether the investments should be made in MK bills, MK notes, or MK bonds. The 

maturities on investments typically range from less than one year to approximately 10 years, 

except for one investment in the Judicial Retirement Fund with a maturity of 

February 15, 2036. 

Amounts that are not necessary to meet current obligations are invested in MK securities. 

Amounts needed to meet current obligations are invested overnight in one-day MK 

securities, which are redeemed at face value plus accrued interest. If amounts held in cash, 

overnight securities and maturing securities are inadequate to meet required outlays, 

investments would be selected for redemption based on a review of the advantages of each of 

the alternatives and an assessment of the appropriateness of the securities in the portfolio 

under current investment policy. 

Investments are valued at cost, adjusted for unamortized premiums and discounts, if 

applicable. The premiums and discounts are recognized as adjustments to interest income, 

utilizing the effective interest method. Investments held in one-day securities are shown in 

the Note 3 as Non-Marketable Par Value Securities. 

e.	 Accounts Receivable, Net 

Accounts receivable consist primarily of: 

 The amount due from the DCRB for the District’s share of benefits paid by the Office to 

which the recipients became entitled during the reporting period, but which, by law, are 

paid on the first business day of the subsequent period; 

 Pending amounts due from annuitants as a result of benefit overpayments that have not 

completed collection due process; and 

 Amounts due from annuitants as the result of benefit overpayments. 

f.	 Advances from Others 

The Office is authorized to disburse funds for the District’s share of monthly benefits, and 

the employer share of Post-1987 health and life insurance premiums. Under a memorandum 

of understanding with the DCRB, the Office is to receive an advance of these monies prior to 

the actual disbursements. 

g.	 Accrued Pension Benefits Payable 

Accrued pension benefits payable relates primarily to retirement benefits to which the 

recipients became entitled during the reporting period, but which, by law, are paid on the first 

business day of the subsequent period. This accrual may also include amounts for refund 

claims for which processing was not completed during the reporting period but will be paid 

in the subsequent period. 

46 
h. Actuarial Pension Liability 

The actuarial cost method used to determine costs for the Police Officers and Firefighters’ 

Retirement Plan and Teachers’ Retirement Plan is the Projected Unit Credit Cost Method. 

Under this funding method, the accrued liability is determined based on service earned to the 

valuation date. Because the benefits under the Police Officers and Firefighters’ Retirement 

Plan and the Teachers’ Retirement Plan were fully accrued at June 30, 1997, the accrued 

liability is calculated as the present value of future benefits expected to be paid and there is 

no normal cost. 

The actuarial cost method used to determine costs for the Judges’ Retirement Plan is the 

Individual Entry Age Normal Cost Method. Under this funding method, the normal cost is a 

level percent of covered salary, which, along with the member contributions, will pay for 

projected benefits at retirement for the active plan participants. The level percent developed 

is called the normal cost rate and the product of that rate and payroll is the normal cost. The 

actuarial accrued liability is that portion of the present value of projected benefits that will 

not be paid by future normal costs or member contributions. The difference between this 

liability and the funds accumulated at the same date is referred to as the unfunded actuarial 

pension liability. 

The economic assumptions (rate of return, inflation, and salary increases) are based upon the 

requirements of Statement of Federal Financial Accounting Standards (SFFAS) No. 33, 

Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting the 

Gains and Losses from Changes in Assumptions and Selecting Discount Rates and Valuation 

Dates. 

To calculate the actuarial pension liabilities for FY 2023 and FY 2022, the Office used a 

100-year yield curve of spot rates developed by Treasury’s Office of Economic Policy. The 

yield curve is based on a 10-year average of quarterly rates, consistent with the requirements 

of SFFAS No. 33. The assumptions for inflation and salary increases were also the average 

of 10-year historical values, with the exception of the FY 2023 salary increase assumption 

for firefighters. The FY 2023 salary increase assumption for firefighters was set to the 

negotiated salary increase of 3.5% for FY 2024 and an 11-year average that includes the 

10-year historical values plus the negotiated pay increase for FY 2024 for subsequent years. 

For FY 2023, the assumptions used to calculate the pension liabilities were spot rates 

gradually increasing from 1.30 percent to discount FY 2024 payments, to a maximum of 

3.26 percent to discount longer term payments; annual inflation and cost-of-living 

adjustments of 2.58 percent for judges, 2.60 percent for teachers, and 2.63 percent for police 

officers and firefighters; and salary increases at an annual rate of 1.67 percent for judges, 

2.10 percent for teachers, 2.75 percent for police officers, and 2.55 percent for firefighters. 

The assumptions used to calculate the pension liabilities for FY 2022 were spot rates 

gradually increasing from 0.87 percent to discount FY 2023 payments, to a maximum of 

3.21 percent to discount longer term payments; annual inflation and cost-of-living 

adjustments of 1.88 percent for judges, 2.14 percent for teachers, and 2.15 percent for police 

47 
officers and firefighters; and salary increases at an annual rate of 1.26 percent for judges, 

2.30 percent for teachers, 2.15 percent for police officers, and 2.20 percent for firefighters. 

The economic assumptions used by the Office for the Police Officers and Firefighters’, 

Teachers’, and Judges’ Retirement Plans differ from those used by Office of Personnel 

Management (OPM) for the following reasons: (1) the annual rate of salary increase 

assumptions are based on different plan member experience; (2) the annual rate of inflation 

and cost-of-living adjustment assumptions are based on different statutory requirements 

(applicable Consumer Price Index and period of calculation); and (3) for the discount rate 

assumption, OPM and the Office use Treasury spot rate yield curves, but the averaging 

periods differ and OPM converts the yield curve to a single equivalent rate while for 

teachers, police officers, and firefighters, the Office uses the individual yield curve rates. 

i. Appropriations Received and Used 

Treasury is required to make annual payments from the General Fund of the Treasury to the 

D.C. Federal Pension Fund and Judicial Retirement Fund and to amortize the original 

unfunded liabilities assumed by the Federal Government and any subsequent changes in 

liabilities over a period of time and to fund the normal cost and necessary administrative 

expenses of the D.C. Federal Pension Fund and the Judicial Retirement Fund. The 

appropriations are received into the Office’s appropriation funds and are transferred out to 

the D.C. Federal Pension Fund and the Judicial Retirement Fund to be invested in nonmarketable GAS securities. The Office has permanent and indefinite appropriations to cover 

the Accrued Pension Benefits Payable, the Actuarial Pension Liability, and costs to 

administer the retirement plans. Congress has appropriated funds or funding is otherwise 

available to pay amounts due. In accordance with SFFAS No. 7, Accounting for Revenue 

and Other Financing Sources, the payment from the Office’s appropriation funds results in 

an appropriation used, as reported in the accompanying Consolidated Statements of Changes 

in Net Position. 

j. Treasury Employee Retirement Plans 

The D.C. Federal Pension Fund and Judicial Retirement Fund pay the salaries and benefits of 

Treasury employees who support the Office as reasonable and necessary expenses incurred in 

carrying out the Secretary’s responsibilities under the Act. In FY 2023 and FY 2022, Office 

staff salaries and benefits were split 95 percent and five percent between the D.C. Federal 

Pension Fund and the Judicial Retirement Fund, respectively. This split represents the level 

of effort required to manage the administrative activities for each fund. 

The Office’s employees participate in the Civil Service Retirement System (CSRS) or the 

Federal Employees Retirement System (FERS). FERS was established by Public 

Law 99-335. Pursuant to this law, FERS and Social Security automatically cover most 

employees hired after December 31, 1983. Employees hired before January 1, 1984, elected 

to either transfer to FERS or remain in CSRS. 

All employees are eligible to contribute to the Thrift Savings Plan (TSP). For employees 

participating in FERS, TSP accounts are automatically established, and the D.C. Federal 

48 
 

Pension Fund and the Judicial Retirement Fund make mandatory contributions of one percent 

of the Treasury employees’ base pay to the accounts. In addition, the D.C. Federal Pension 

Fund and the Judicial Retirement Fund make matching contributions, ranging from one 

percent to four percent of base pay, for FERS eligible employees who contribute to their TSP 

accounts. Pursuant to law, mandatory and matching contributions are not made to the TSP 

accounts established for CSRS employees. 

FERS employees and certain CSRS reinstatement employees participate in the Social 

Security program. The D.C. Federal Pension Fund and Judicial Retirement Fund remit the 

employer’s share of the required contributions for eligible employees. 

The D.C. Federal Pension Fund and Judicial Retirement Fund do not report information 

pertaining to the CSRS and FERS retirement plans covering Treasury employees. OPM is 

responsible for reporting amounts such as plan assets, accumulated plan benefits, and related 

unfunded liabilities, if any. 

k. President’s Budget 

The President’s Budget for 2025, which includes actuals for FY 2023, has not yet been 

published as of the date of these financial statements. The President’s Budget is currently 

expected to be published and delivered to Congress in early February 2024. The FY 2022 

Combined Statement of Budgetary Resources (SBR) was reconciled to the Program and 

Financing (P&F) Schedules within the President’s Budget for 2024, published in March 

2023, and there were no differences for obligations incurred, budgetary resources, status of 

budgetary resources, or net outlays. 

The President's Budget for 2024, which includes the Office’s budget within the Other 

Independent Agencies’ budget appendix, is available at the OMB website. 

l. Revenue and Financing Sources 

All proceeds received and deposited by the Office are used for the purpose of providing 

annuity payments for retired District of Columbia teachers, police officers and firefighters for 

services earned prior to July 1, 1997, and for retirement benefits earned by District of 

Columbia judges, regardless of when services were earned. 

Funding for the Judicial Retirement Fund is authorized by 111 Stat. 757, Sec. 11251, Public 

Law 105-33 as amended by 112 Stat. 2681-534, Sec. 804(a)(4), Public Law 105-277. 

Funding for the D.C. Federal Pension Fund is authorized by 118 Stat. 3967, Sec. 11084, 

Public Law 108-489. Sources of revenue or other financing sources for the years ended 

September 30, 2023, and 2022, were annual federal payments into the funds, reimbursable 

income, employee contributions, and interest earnings from investments. 

49 
 

m. Income Taxes 

The Office, a component of an agency of the Federal Government, is not subject to Federal, 

state, or local income taxes and accordingly, no provisions for income taxes have been 

recorded in the accompanying consolidated financial statements. 

n. Classified Activities 

Accounting standards require all reporting entities to disclose that the accounting standards 

allow certain statements and disclosures to be modified if needed to prevent the disclosure of 

classified information. 

o. Intragovernmental Costs 

The Office reports intragovernmental costs resulting from the receipt of services provided on 

a reimbursable basis from other federal entities. 

In certain instances, other federal entities incur costs that are directly identifiable to the 

Office’s operations. In accordance with SFFAS No. 4, Managerial Cost Accounting 

Standards and Concepts, as amended, the Office recognizes identified costs paid on behalf of 

the Office by other federal entities. The imputed intragovernmental financing sources the 

Office currently recognizes include the actual cost of future benefits for the CSRS and FERS 

retirement plans and the Federal Employees Health Benefits Program, and Federal 

Employees Group Life Insurance Program that other federal entities pay on the Office’s 

behalf. Such costs appear on the Consolidated Statements of Net Cost and related funding 

appears as imputed financing sources on the Consolidated Statements of Changes in Net 

Position. 

p. Overall Estimates Disclosures 

The use of estimates in the preparation of financial statements requires management to make 

certain estimates and assumptions that effect the recorded amounts of assets and liabilities 

and the reported amount of revenues and expenses during the reporting period. Actual 

results could differ from those estimates. 

q. Entity Assets 

Entity assets are assets which the Office has authority to use in its operations. The Office 

reports entity assets on the Consolidated Balance Sheets. The Office does not have nonentity assets. 

r. Custodial Collections 

Custodial collections were $11.6 thousand and $18.5 thousand for the years ended 

September 30, 2023 and 2022, respectively, and is related to interest and penalties on certain 

debts owed to the Office. Custodial collection activities are considered immaterial and 

incidental to the mission of the Office. 

50 
 

 

 

 

s. Intragovernmental Other Liabilities 

Intragovernmental Other Liabilities were $57.6 thousand and $56.7 thousand for the years 

ended September 30, 2023 and 2022, respectively, and is related to employer contributions 

and payroll taxes payable. Intragovernmental Other Liabilities activities are considered 

immaterial to the mission of the Office. 

2) Fund Balance with Treasury 

The Status of Fund balance with Treasury as of September 30, 2023 and 2022, consisted of 

the following (in thousands): 

2023 2022 

Status of Fund Balance with Treasury: 

Unobligated Balance - Available $ 307 $ 527 

Total $ 307 $ 527 

Fund Balance with Treasury represents uninvested funds to cover disbursements at the end of 

the period. This amount does not agree with Unobligated Balances on the Combined 

Statements of Budgetary Resources because those amounts are in one-day certificates, which 

are intragovernmental investments. 

3) Intragovernmental Investments 

Intragovernmental Investments as of September 30, 2023 and 2022, consisted of the 

following (in thousands): 

2023 

Treasury Securities 

Non-Marketable Par Value 

Non-Marketable Market-based 

Total 

$

$

Cost / 

Acquisition 

Value 

 240,440 

4,117,285 

 4,357,725 

Amortized 

(Premium) 

-

(36,084) 

(36,084) 

Investments 

240,440 

4,081,201 

4,321,641 

Market 

Value 

240,440 

3,818,814 

4,059,254 

Treasury Securities 

Non-Marketable Par Value 

Non-Marketable Market-based 

Total 

$

$

Cost / 

Acquisition 

Value 

 229,628 

3,992,219 

 4,221,847 

2022 

Amortized 

(Premium) Investments 

- 229,628 

(26,893) 3,965,326 

(26,893) 4,194,954 

Market 

Value 

229,628 

3,695,883 

3,925,511 

51 
 

The amortization method utilized by the Office is the effective interest method. The market 

value for notes and bonds is calculated using rates as of September 30, 2023 and 2022, as 

published in the Treasury Quote Sheets prepared by Treasury’s Office of Market Finance. 

Included in these figures are net unrealized losses of $262.4 million and $269.4 million for 

the years ended September 30, 2023 and 2022, respectively. 

The amortized cost of Intragovernmental Investments (including par value securities invested 

overnight) as of September 30, 2023 and 2022, by maturity date is as follows (in thousands): 

2023 2022 

Less than or Equal to 1 Year $ 795,428 $ 804,091 

More than 1 Year and Less than 

or Equal to 5 Years 2,257,828 2,260,116 

More than 5 Years and Less than 

or Equal to 10 Years 1,256,065 1,120,821 

More than 10 Years 12,320 9,926 

Total $ 4,321,641 $ 4,194,954 

4) Accounts Receivable, Net 

The components of Accounts Receivable, Net as of September 30, 2023 and 2022, are as 

follows (in thousands): 

2023 2022 

Accounts Receivable, Gross $ 4,302 $ 3,793 

Allowance for Loss on Accounts Receivable (1,313) (1,779) 

Taxes Receivable 6 14 

Accounts Receivable, Net $ 2,995 $ 2,028 

The Allowance for Loss on Accounts Receivable are attributed to debts resulting from 

benefit overpayments. Accounts Receivable, Net also includes criminal restitution. For 

FY 2023 and FY 2022, the Office reported criminal debt in the gross amount of 

$61.3 thousand, and $654.7 thousand, respectively. The net realizable value of the criminal 

debt reported in FY 2023 and FY 2022 was $2.5 thousand and $55.9 thousand, respectively. 

52 
 

5) Administrative Expenses

Administrative expenses for the years ended September 30, 2023 and 2022, are as follows

(in thousands):

2023 2022 

Intragovernmental Expenses 

Employee Benefits $ 1,350 $ 1,064 

Contractual Services 6,187 5,507 

Rent 631 655 

Total Intragovernmental Expenses 8,168 7,226 

Public Expenses 

Employee Salaries 3,533 3,064 

Contractual Services 10,736 11,795 

Other 356 53 

Total Public Expenses 14,625 14,912 

Total Administrative Expenses $ 22,793 $ 22,138 

6) Pension Expense and Actuarial Pension Liability

Pension Expense and Actuarial Pension Liability for the years ended September 30, 2023 and

2022, includes the following components (in thousands):

2023 2022 

Beginning Liability Balance $ 8,461,013 $ 8,010,108 

Pension Expense: 

Normal Cost 7,400 6,800 

Interest on Pension Liability During the Period 76,537 67,189 

Actuarial Losses During the Period: 

From Experience 359,276 384,154 

From Discount Rate Assumption Change 26,794 193,721 

From Other Economic Assumption Changes 420,539 326,315 

From Non-Economic Assumption Changes - 27,942 

Pension Expense before Other / Non-Actuarial 

Adjustments 890,546 1,006,121 

Less Amounts Paid and Accrued: (571,221) (555,216) 

Ending Liability Balance $ 8,780,338 $ 8,461,013 

53 
 

Reconciliation to amounts reported for the years ended September 30, 2023 and 2022, in the 

Consolidated Statements of Net Cost (in thousands): 

2023 2022 

Pension Expense before Actuarial Assumption Changes: 

Normal Cost 

Interest on Pension Liability During the Period 

Actuarial Loss During the Period from Experience 

Total Pension Expense before Actuarial Assumption Changes 

$ 7,400 

76,537 

359,276 

443,213 

$ 6,800 

67,189 

384,154 

458,143 

Loss on Actuarial Assumption Changes, Net 

Actuarial Losses During the Period: 

From Discount Rate Assumption Change 

From Other Economic Assumption Changes 

From Non-Economic Assumption Changes 

Total Loss on Actuarial Assumption Changes, Net 

26,794 

420,539 

-

447,333 

193,721 

326,315 

27,942 

547,978 

Total Pension Expense $ 890,546 $ 1,006,121 

Federal Benefit Payments 

Federal pension benefits paid and accrued were $553.6 million and $17.6 million from the 

D.C. Federal Pension Fund and Judicial Retirement Fund, respectively, for 2023, and 

$538.8 million and $16.4 million, respectively, for 2022. For FY 2023 and FY 2022, 

approximately $456.4 thousand and $53.6 thousand, respectively, represent contribution 

refunds to plan participants of the D.C. Federal Pension Fund and the Judicial Retirement 

Fund. 

Actuarial Gains and Losses 

In FY 2023, the Office reported a net liability actuarial loss in the D.C. Federal Pension Fund 

and the Judicial Retirement Fund. The liability actuarial losses were $26.8 million due to the 

new discount rate assumptions, $359.3 million from experience, and $420.5 million due to 

changes in pay and cost-of-living assumptions. The net result was a total liability actuarial 

loss of $806.6 million for the D.C. Federal Pension Fund and Judicial Retirement Fund. 

In FY 2022, the Office reported a net liability actuarial loss in the D.C. Federal Pension Fund 

and the Judicial Retirement Fund. The liability actuarial losses were $193.7 million due to 

the new discount rate assumptions, $384.2 million from experience, $326.3 million due to 

changes in pay and cost-of-living assumptions, and $27.9 million due to other assumption 

changes which include the change in the mortality projection scale from MP-2020 to 

MP-2021. The net result was a total liability actuarial loss of $932.1 million for the 

D.C. Federal Pension Fund and Judicial Retirement Fund. 

54 
 

 

 

7) Reconciliation of Net Cost of Operations to Agency Outlays, Net 

The Reconciliation of Net Cost of Operations to Agency Outlays, Net depicts the differences 

between proprietary financial accounting information and budgetary accounting information. 

Proprietary financial accounting information is intended to provide a picture of the 

government’s financial operations and financial position and is presented on an accrual basis. 

The accrual basis includes information about costs arising from the consumption of assets 

and the incurrence of liabilities. Budgetary accounting information is used for planning and 

control purposes and relates to both the receipt and use of cash. The reconciliation of net 

cost, presented on an accrual basis, and the net outlays, presented on a budgetary basis, 

provides an explanation of the relationship between financial accounting and budgetary 

information. The reconciliation serves to identify costs paid for in the past, those that will be 

paid in the future, and to assure integrity between financial and budgetary information. 

For the fiscal years ended September 30, 2023 and 2022, the Reconciliation of Net Cost of 

Operations to Agency Outlays, Net consisted of the following (in thousands):

 2023 2022 

Net Cost of Operations $ 828,033 $ 964,847 

Components of Net Cost of Operations Not Part of Outlays: 

Increase in Assets Not Affecting Outlays: 

Accounts Receivable 967 734 

Total Increase in Assets Not Affecting Outlays: 967 734 

(Increase)/Decrease in Liabilities Not Affecting Outlays: 

Accounts Payable and Advances from Others (3,116) (3,033)

 Other Liabilities - Accrued Payroll and Benefits, and Other 5 144

 Other Liabilities - Actuarial Pension Liability (319,325) (450,905)

 Other Liabilities - Accrued Pension Benefits Payable (1,306) (1,879) 

Total (Increase)/Decrease in Liabilities Not Affecting Outlays: (323,742) (455,673) 

Other Financing Sources:

 Imputed Financing Sources (343) (211)

 Employee Contributions 784 679 

Total Other Financing Sources: 441 468 

Other 4,124 3,491 

Total Components of Net Cost of Operations Not Part of Outlays (318,210) (450,980) 

Components of the Outlays That Are Not Part of Net Cost of

Operations: 

Changes in Premiums and Amortization of Premiums (14,207) (14,900) 

Changes in Interest Receivable (286) 1,348 

Total Components of Outlays That Are Not Part of Net Cost of 

Operations (14,493) (13,552) 

Agency Outlays, Net $ 495,330 $ 500,315 

55 
 

 

8) Additional Information Related to the Combined Statements of Budgetary Resources 

Net Adjustments to Unobligated Balance Brought Forward October 1 

During the years ended September 30, 2023 and 2022, adjustments were made to the balance 

of unobligated budgetary resources available as of October 1, 2022 and 2021. These 

adjustments primarily include Recoveries of Prior Year Unpaid Obligations that were 

obligated in prior years. 

The adjustments during the years ended September 30, 2023 and 2022, are as follows 

(in thousands): 

2023 2022 

Unobligated Balance Brought Forward, October 1 $ 26,770 $ 22,933 

Recoveries of Prior Year Unpaid Obligations 1,751 330 

Other Changes in Unobligated Balances 761 780 

Unobligated Balance from Prior Year Budget Authority, Net 

(Discretionary and Mandatory) $ 29,282 $ 24,043 

Undelivered Orders 

Undelivered orders for the Office represent goods and services ordered and obligated which 

have not been received or paid. Undelivered orders as of September 30, 2023 and 2022, 

consisted of the following (in thousands): 

2023 

Federal Non-Federal Total 

Unpaid undelivered orders at 

the end of the year $ 227 $ 4,131 $ 4,358

 2022 

Federal Non-Federal Total 

Unpaid undelivered orders at 

the end of the year $ 210 $ 5,435 $ 5,645 

56 
PART 4 

REQUIRED 

SUPPLEMENTARY 

INFORMATION 

(Unaudited) 

-

Department of the Treasury

Office of D.C. Pensions

Combining Statements of Budgetary Resources

By Fund (Unaudited)

For the Years Ended September 30, 2023 and September 30, 2022

(In Thousands)

See accompanying independent auditors' report.

2023 2022

D.C. Judicial

Retirement and

Survivors Annuity

Fund

D.C. Federal Pension

Fund

Combined D.C.

Pension Funds Total

D C. Judicial

Retirement and

Survivors Annuity

Fund

D.C. Federal Pension

Fund

Combined D.C.

Pension Funds Total

Budgetary Resources:

Unobligated Balance from Prior Year Budget Authority, Net $ 3 $ 29,279 $ 29,282 $ 14 $ 24,029 $ 24,043

Appropriations (Discretionary and Mandatory) 1,180,938 1,221,579 36,374 1,097,383 1,133,757

Spending Authority from Offsetting Collections 344,225 344,225 - 304,238 304,238

Total Budgetary Resources: $ 40,

40,641

644 $ 1,554,442 $ 1,595,086 $ 36,388 $ 1,425,650 $ 1,462,038

Status of Budgetary Resources:

New Obligations and Upward Adjustments $ 40,644 $ 1,524,502 $ 1,565,146 $ 36,388 $ 1,398,880 $ 1,435,268

Unobligated Balance Exempt from Apportionment, end ofyear - 29,940 29,940 - 26,770 26,770

Total Status ofBudgetary Resources: $ 40,644 $ 1,554,442 1,595,086 $ 36,388 $ 1,425,650 $ 1,462,038

Outlays, Net:

Outlays. Net (Discretionary and Mandatory) $ 40,485 $ 1,177,964 $ 1,218,449 $ 36,249 $ 1,093,215 $ 1,129,464

Distributed Offsetting Receipts (22,475) (700,644) (723,119) (19,422) (609,727) (629,149)

Agency Outlays, Net (Discretionary and Mandatory) $ 18,010 $ 477,320 $ 495,330 $ 16,827 $ 483,488 $ 500,315
(This page intentionally left blank.) 

60 
PART 5 

OTHER 

INFORMATION 

(Unaudited) 

- -

97 

179 

Department of the Treasury 

Office of D.C. Pensions 

Consolidating Balance Sheers

By Fund (Unaudited) 

As of September 30, 2023 and September 30, 2022 

(In Thousands) 

Assets: 

lntragovemmenta/ 

D.C. Judicial 

Re/jrement and 

SUIVi-.ors Annuity 

Fund 

2023 

D.C. Federal Pension 

Fund 

Consolidated D.C. 

Pension Funds Total 

D.C. Judicial 

Reiirement and 

Survivors Annuity 

Fund 

2022 

D.C. Federal Pension 

Fund 

Consolidated D.C. 

Pension Funds Total 

Fund Balance with Treaswy $ $ 210 $ 307 $ 128 $ 399 $ 

Investments, Net 

lnuagovemmental Investments 205,740 4,115,901 4,321,641 196,413 3,998,541 4,194,954 

Interest Receivable 566 20,915 21,481 488 21,200 21,688 

other 

Tota/ lntragovemmental 206,403 4,137,026 4,343,429 197,029 4,020,140 4,217,169 

than Jntragovernmenta/ 

Accounts Receivable, Net 3 2,992 2,995 3 2,025 2,028 

Tota/ Other than lnuagovemmental 3 2,992 2,995 3 2,025 2,028 

Total Assets s 206,406 $ 4,140,018 s 4,346,424 s 197,032 $ 4,022,165 s 4,219,197 

Uabilities: 

lntragovermental 

Accounts Payable 62 $ 117 s $ 39 $ 76 s 115 

Other Liabilities 4 54 58 3 54 57 

Tota/ lntragovemmental 66 171 237 42 130 172 

Other than lntragovernmenta/ 

AcCOIHltS Payable 8 1,711 1,719 6 1,831 1,837 

AdVances from Others 29,940 29,940 26,no 26,no 

Ot.her Uabilities 

Accrued Pen$ion Benefits Payable 1,450 46,834 48,284 1,327 45,651 46,978 

Actuarial Pensioo Uability 326,508 8,453,830 8,780,338 294,513 8,166,500 8,461,013 

Acctued Payroll and Benefits 31 524 555 28 533 561 

Total Other than lntragovemmenta/ 

Total UabiPties s 

327,997 

328,063 $ 

8,532,839 

8,533,010 s 

8,860,836 

8,861,073 $ 

295,874 

295,916 $ 

8,241,285 

8,241,415 s 

8,537,159 

8,537,331 

Net Position: 

Cumulalive Resuts of Operations - Foods 

from Ot.her thoo Dedicated Collections 

Total Net Position 

Tota/ Uabilittes and Net Position 

$ 

$ 

(121,657) 

(121,657) 

206,406 

$ 

$ 

(4,392,992) 

(4,392,992) 

4,140,018 

s 

s 

(4,514,649) 

(4,514,649) 

4,346,424 

$ 

$ 

(98,884) 

(98,884) 

197,032 

$ 

$ 

(4,219,250) 

(4,219,250) 

4,022,165 

$ 

s 

{4,318,134) 

(4,318,134) 

4,219,197 

See accompanying independent auditors' reporl. 

63
 

527 
-

- -

Department of the Treasury

Office ofD.C. Pensions

Consolidating Statements of Net Cost

By Fund (Unaudited)

For the Years Ended September 30, 2023 and September 30, 2022

(In Thousands)

See accompanying independent auditors' report

2023 2022

DC. Judicial

Retirement and

Survivors Annuity

Fund

DC Federal Pension

Fund

Consolidated D C.

Pension Funds Total

D.C. Judicial

Retirement and

Survivors Annuity

Fund

DC Federal Pension

Fund

Consolidated D C.

Pension Funds Total

Program Costs

Administrative Expenses $ 559 $ 22,234 $ 22,793 $ 573 $ 21,565 $ 22,138

District Benefit Payments and Employer Share of

DC Health and Life Plans 338,109 338,109 297,820 297,820

Pension Expense Before Actuarial Assumption Changes 29,828 413,385 443,213 25,997 432,146 458,143

Total Program Costs 30,387 773,728 804,115 26,570 751,531 778,101

Less Earned Revenues

Reimbursable Income - 341,056 341,056 - 300,401 300,401

Interest Earned 4,124 77,451 81,575 3,491 56,661 60,152

Employee Contributions 784 784 679 - 679

Total Earned Revenues 4,908 418,507 423,415 4,170 357,062 361,232

Net Program Costs Before Loss from Actuarial Assumption Changes 25,479 355,221 380,700 22,400 394,469 416,869

Loss on Actuarial Assumption Changes, Net 19,786 427,547 447,333 9,727 538,251 547,978

Net Cost of Operations $ 45,265 $ 782,768 $ 828,033 $ 32,127 $ 932,720 $ 964,847

64 
Department ofthe Treasury

Office ofD.C. Pensions

Consolidating Statements of Changes in Net Position

By Fund (Unaudited)

For the Years Ended September 30. 2023 and September 30. 2022

(In Thousands)

See accompanying independent auditors' report.

2023 2022

DC. Judicial

Retirement and

Survivors Annuity

Fund

D C. Federal Pension

Fund

ConsolidatedD.C.

Pension Funds Total

D.C. Judicial

Retirement and

Survivors Annuity

Fund

D C. Federal Pension

Fund

Consolidated D C.

Pension Funds Total

Unexpended Appropriations:

Beginning Balance $ - $ - $ - $ - $ - $ -

Appropriations Received 22,475 608,700 631,175 19,422 539,512 558,934

Appropriations Used (22,475) (608,700) (631,175) (19,422) (539,512) (558,934)

Net Change in Unexpended Appropriations - - - - - -

Total Unexpended Appropriations - Ending Balance - - - - - -

Cumulative Results of Operations:

Beginning Balance $ (98,884) $ (4,219,250) $ (4,318,134) $ (86,189) $ (3,826,243) $ (3,912,432)

Appropriations Used 22,475 608,700 631,175 19,422 539,512 558,934

Imputed Financing 18 325 343 10 201 211

Net Cost of Operations (45,265) (782,768) (828,033) (32,127) (932,720) (964,847)

Net Change in Cumulative Results ofOperations (22,772) (173,743) (196,515) (12,695) (393,007) (405,702)

Total Cumulative Results of Operations - Ending Balance $ (121,656) $ (4,392,993) $ (4,514,649) $ (98,884) $ (4,219,250) $ (4,318,134)

Net Position $ (121,656) $ (4,392,993) $ (4,514,649) $ (98,884) $ (4,219,250) $ (4,318,134)
Department of the Treasury

Office ofDC. Pensions

Schedule ofPension Expense - by Fund (Unaudited)

For the Years Ended September 30, 2023 and September 30. 2022

(In Thousands)

See accompanying independent auditors' report.

2023 2022

DC. Judicial

Retirement and

Survivors Annuity

Fund

DC Federal Pension

Fund

Consolidated DC.

Pension Funds Total

D C. Judicial

Retirement and

Survivors Annuity

Fund

D C. Federal Pension

Fund

Consolidated D C.

Pension Funds Total

Beginning Liability Balance $ 294,513 $ 8,166,500 $ 8,461,013 $ 275,210 $ 7,734,898 $ 8,010,108

Pension Expense:

Normal Cost 7,400 - 7,400 6,800 - 6,800

Interest on Pension Liability During the Period 7,498 69,039 76,537 7,115 60,074 67,189

Actuarial (Gains) Losses During the Period:

From Experience 14,930 344,346 359,276 12,082 372,072 384,154

From Discount Rate Assumption Change (4,771) 31,565 26,794 1,278 192,443 193,721

From Other Economic Assumption Changes 24,557 395,982 420,539 7,413 318,902 326,315

From Non-Economic Assumption Changes - - - 1,036 26,906 27,942

Pension Expense before Other/Non-Actuarial Adjustments 49,614 840,932 890,546 35,724 970,397 1,006,121

Less Amounts Paid and Accrued: (17,619) (553,602) (571,221) (16,421) (538,795) (555,216)

Ending Liability Balance $ 326,508 $ 8,453,830 $ 8,780,338 $ 294,513 $ 8,166,500 $ 8,461,013
 

Actuarial Valuation Report FY 2023 (unaudited) 

Executive Summary 

Highlights of the Actuarial Valuation 

The actuarial valuation report has been completed for the following program for the most recent plan year: 

United States Department of the Treasury District of Columbia Pensions Program (Program) 

The Program refers to the federal responsibility for benefit payments under the following District of Columbia 

(D.C.) retirement plans: District of Columbia Police Officers and Firefighters' Retirement Plan, District of Columbia 

Teachers' Retirement Plan, and District of Columbia Judges' Retirement Plan. The designated assets for the 

federal administration of these plans are held in two separate funds. The District of Columbia Teachers, Police 

Officers and Firefighters Federal Pension Fund (“D.C. Federal Pension Fund”) covers federal payments under the 

District of Columbia Police Officers and Firefighters' Retirement Plan and District of Columbia Teachers' 

Retirement Plan. The Judicial Retirement and Survivors Annuity Fund (“Judicial Retirement Fund”) covers 

payments under the District of Columbia Judges' Retirement Plan. 

The purpose of this report is to present the results of the actuarial valuation including: 

ł	 To illustrate the current assets and liabilities of each Plan as of the end of Fiscal Year (FY) 2023
 

(October 1, 2022 through September 30, 2023);
 

ł	 To review the experience of the Program over the past year and to discuss reasons for changes in Program 

costs; 

ł	 To determine the appropriate contribution to be paid by the Department of the Treasury to the Funds in FY 

2024 (October 1, 2023 through September 30, 2024); and 

ł	 To identify and discuss any emerging trends in Program costs. 

This report also includes certain statement line items and footnote disclosures necessary to compute the annual 

pension expense in accordance with Statement of Federal Financial Accounting Standards No. 5, Accounting for 

Liabilities of the Federal Government, and No. 33, Pensions, Other Retirement Benefits, and Other 

Postemployment Benefits: Reporting the Gains and Losses from Changes in Assumptions and Selecting Discount 

Rates and Valuation Dates (SFFAS 5 and SFFAS 33). Use of the valuation results for other purposes may not be 

appropriate. 

Per Actuarial Standards of Practice 4, Measuring Pension Obligations and Determining Pension Plan Costs or 

Contributions (ASOP 4), effective for measurement dates after February 15, 2023, when measuring pension 

obligations, the combined effect of assumptions is expected to have no significant bias (i.e., it is not significantly 

optimistic or pessimistic) for non-prescribed assumptions except when provisions for adverse deviation are 

included. The combined effect of non-prescribed assumptions used for measuring the pension obligations in this 

valuation does not have significant bias. 

Summary of Results 

As of October 1, 2023 

Police Officers and 

Firefighters', and 

Teachers' Plans 

Judges' Plan

Actuarial Accrued Liability 

Plan Assets 

Unfunded Actuarial Accrued Liability 

$ 

$ 

8,500,663,382 

(4,108,055,077) 

4,392,608,305 

$ 

$ 

327,958,468 

(206,059,441) 

121,899,027 

Normal Cost with Interest (including expected 

employee contributions) N/A $ 9,300,000 

67
 
- -

Executive Summary 

Highlights of the Actuarial Valuation 

Summary of Gains and Losses 

As part of the review of the valuation, an actuarial gain/loss analysis was performed. Expected liabilities and plan 

assets were developed presuming all demographic and economic assumptions from the prior valuation were 

realized during the plan year. These expected values were then compared to the actual results. The factors 

causing the liabilities or assets to be greater than expected (a loss for liabilities and a gain for assets), or smaller 

than expected (a gain for liabilities and a loss for assets) were isolated. Differences in liability not directly 

attributable to experience different than assumed, such as changes in assumptions and methods, were 

separately measured from this process. 

The different sources of gains and losses, as well as their individual impacts, are outlined below. 

Source of Liability (Gain)/Loss due to Actuarial Experience 

Source of Demographic (Gain)/Loss 

Police Officers and 

Firefighters', and 

Teachers' Plans 

Judges' Plan 

(Gains)/Losses due to Plan Experience: 

Active Decrements $ (6,123,186) $ (2,110,011) 

Inactive Mortality (39,516,638) (27,018)

 Salary Increase 17,540,864 2,331,568 

New Entrants N/A -

Cost-of-Living Adjustment (COLA) 

Different than Expected 345,651,919 14,285,212 

(Gains)/Losses due to Census Changes: 27,718,263 661,744 

(Gains)/Losses due to New Terminated Vested 

Plan Members: 

(Gains) / Losses due to New Actives Due to - - Ongoing Data Management: 

Total $ 345,271,222 $ 15,141,495 

We have provided clarification on these items below: 

• (Gains)/Losses due to Plan Experience: The liability for each plan is expected to change based on 

certain demographic and economic assumptions; however, actual plan experience will differ to some 

degree. This creates (gains) or losses due to plan experience being different than expected with 

these assumptions. This includes the following primary factors: 

• Active Decrements: The actuarial valuation assumes that each active plan member has 

a particular probability of terminating, retiring, becoming disabled, or becoming deceased in each 

year. An individual (gain) or loss is generated based on the plan member's actual status in the 

current valuation year based on the difference from what was expected. The gain for the Police 

Officers and Firefighters' and Teachers' Plans is primarily due to favorable retirement experience with 

fewer Police Officers and Firefighters retiring than expected. The gain for the Judges' is primarily due 

to favorable retirement experience. 

68
 
Executive Summary 

Highlights of the Actuarial Valuation 

• Inactive Mortality: The actuarial valuation assumes that each inactive plan member has 

a particular probability of becoming deceased in each year. An individual (gain) or loss is generated 

based on whether the plan member actually dies during the year. The gain shown for the 

Police Officers and Firefighters' and Teachers' Plans is driven by plan members in pay status dying at an 

earlier age and in greater number than expected in the past year. For the Judges' Plan, the mortality 

gains and losses ultimately resulted in a net gain. The losses incurred by beneficiaries and disableds 

surviving longer than expected were offset by the gains of retirees dying at an earlier age and in greater 

number than expected. Long-term gains and losses are expected to offset each other with experience 

aligning to the assumed mortality probabilities. 

• Salary Increase: The actuarial valuation assumes that salaries for active plan members 

will increase by a certain amount. An individual (gain) or loss is generated for each plan member based 

on their actual salary amount reported in the current valuation. A gain is reported when 

a plan member's actual salary is lower than the expected amount, and a loss is reported when a 

plan member's actual salary is higher than the expected amount. The loss for Judges' Plan is due to the 

actual salary increases exceeding the assumed rate. In FY 2023, Police Officers and Firefighters received 

pay increases retroactive to October 11, 2020 and Teachers received pay increases retroactive to 

October 13, 2019. The loss for the Police Officers and Firefighters' and Teachers' Plans due to the 

retroactive pay increases was $20.8 million. This was offset by a gain of $3.3 million due to salary 

increases being less than expected. 

• New Entrants: The actuarial valuation incurs a loss whenever new members enter the plan with 

past service. The Police Officers and Firefighters' and Teachers' Plans are closed and will never incur 

a gain or loss due to this reason. The Judges' Plan did have seven new entrants but the individuals 

did not join with past service, therefore there is no (gain) or loss. 

• COLA Different Than Expected: The actuarial valuation assumes that retirement benefits for 

inactive plan members that are receiving benefits will increase by a certain amount. An individual 

(gain) or loss is generated for each plan member based on their actual benefit amount reported in the 

current valuation. Inflation for 2022 was significantly above recent history creating higher actual COLA 

percentages than expected and driving losses in the Police Officers and Firefighters' and Teachers' Plans 

and the Judges’ Plan. The actual COLA for Police Officers and Firefighters was 6.50% compared to the 

2.15% assumption. The actual COLA for Teachers was 6.30% compared to the 2.14% assumption. The 

actual COLA for Judges was 8.70% compared to the 1.88% assumption. Additionally, for Police Officers 

and Firefighters retired prior to February 15, 1980 that receive equalization, the collective bargaining 

agreement created a loss of $24.4 million. 

• (Gains)/Losses due to Census Changes: Each year, ODCP prepares the census data that will be used as the 

basis for the annual valuation. Inevitably, there will be updates to the census data beyond those that we would 

expect due to the passage of time. This category of (gain)/loss is described in more detail below. 

For the Police Officers and Firefighters' and Teachers' Plans, the net loss amount was $27.7 million and 

includes the following: 

• A $27.5 million loss resulting from new beneficiaries following the death of plan members for
 

whom the chosen form of payment was unknown.
 

• A $0.8 million loss resulting from active plan members who retired or terminated within the past 

year, primarily due to benefits calculated at retirement different than previously estimated or those 

who were not eligible to begin benefits in the prior valuation. 

• A $0.6 million net gain resulting from other miscellaneous demographic changes including ongoing 

data management (unexpected changes to data fields such as hire date, salary, service, amounts etc.) 

offset by losses from rehires. 

69
 
Executive Summary 

Highlights of the Actuarial Valuation 

For the Judges' Plan, the total loss amount of $662,000 includes the following: 

• A $212,000 net loss resulting from active plan members who retired or terminated 

within the past year, primarily due to benefits calculated at retirement different than previously 

estimated. 

• A $330,000 net loss resulting from ongoing data management, including unexpected changes 

to data fields such as hire date, salary, service, etc. 

• A $45,000 loss resulting from data updates for continuing inactive plan members, primarily due 

to additional spouse information provided with these spouses being younger than assumed. 

• A $75,000 loss resulting from new beneficiaries following the death of plan members. 

70
 
Executive Summary 

Highlights of the Actuarial Valuation 

Source of Asset (Gain)/Loss due to Actuarial Experience 

Asset (Gain)/Loss D.C. Federal Pension 

Fund Judicial Retirement Fund 

Beginning of Year Assets $ 3,991,603,721 $ 196,811,485 

Expected Return on Assets 32,235,783 4,908,493 

Actual Return on Assets 80,638,894 4,211,915 

Asset (Gain)/Loss $ (48,403,111) $ 696,578 

The plan assets experienced the following rates of return during the prior plan year: 

D.C. Federal Pension 

Fund Judicial Retirement Fund 

Assets 2.01% 2.11% 

As noted on page 55 of this report in the Interest Rates for (Gain)/Loss section, the expected return on assets for 

the Judicial Retirement Fund is based on the prior year effective interest rate of 2.61% while the D.C. Federal 

Pension Fund's expected return on assets is based on the first rate on the prior year's yield curve, 0.87%. The 

Judicial Retirement Fund experienced a lower-than-anticipated return of 2.11% on fund assets and the D.C. 

Federal Pension Fund experienced a higher-than-anticipated return of 2.01% on fund assets, thus resulting in an 

asset loss and an asset gain, respectively. 

Changes in Plan Provisions from the Previous Valuation 

The valuation for the current plan year was based on the same plan provisions as the valuation for the prior plan 

year. We are not aware of any other changes to the plans since the last valuation. 

A full summary of the plan provisions and plan changes for each plan (if any) can be found later in this report in 

Appendix C: Plan Provisions Summary. 

71
 
Executive Summary 

Highlights of the Actuarial Valuation 

Source of Liability (Gain)/Loss due to Changes in Actuarial Assumptions from the Previous 

Valuation 

Assumption Change 

Police Officers and 

Firefighters', and 

Teachers' Plans 

Judges' Plan 

Discount Rate Assumption $ 31,565,314 $ (4,771,150) 

Other Economic Assumptions 395,982,245 24,556,682 

Non-Economic Assumptions - -

Total $ 427,547,559 $ 19,785,532 

The discount rate assumption was updated according to prescribed guidance. While the Effective Interest Rate 

(EIR) for the Police Officers and Firefighters' and Teachers' Plans increased, it did not increase as much as 

expected, thereby creating a small loss. The EIR for the Judges' Plan increased, causing a gain. 

For the Police Officers and Firefighters' and Teachers' Plans and Judges' Plan, the cost-of-living adjustment 

(COLA) assumption for annuitants increased causing a loss. The wage inflation assumption increased for the 

Police Officers and Firefighters' Plan and decreased for the Teachers' Plan, which resulted in a net loss. For the 

Judges' Plan, the other economic assumption change was an increase to the wage inflation assumption for active 

plan members which caused a loss. A detailed description of the changes since prior year is available in Appendix 

A: Actuarial Assumptions and Methods. 

While RPEC released an updated mortality report in October 2022, they did not produce a Scale MP-2022. 

Therefore, the Police Officers and Firefighters', and Teachers' Plans, and the Judges' Plan are using the most 

current projection scale available. A complete description of the actuarial assumptions and rationale can be found 

in Appendix A: Actuarial Assumptions and Methods and Appendix B: Rationale. 

72
 
Executive Summary 

Highlights of the Actuarial Valuation 

Government Contributions 

This report includes a calculation of the Government Contribution required to be made before the end of 

FY 2024 (excluding the reimbursement for expenses). The table below contains Government Contribution 

(excluding expenses) for FY 2023 and FY 2024. 

Contribution Year 

Government Contribution 

(excluding expenses) 

D.C. Federal Pension Fund Judiciary Retirement Fund 

September 30, 2023 $ 589,600,000 $ 22,000,000 

September 30, 2024 $ 659,400,000 $ 26,200,000 

The increase/(decrease) in the Government Contribution amounts from FY2023 to FY2024 is explained in the 

table below. 

Judges' Plan 

Police Officers and 

Firefighters', and 

Teachers' Plans 

Full amortization of the 10/1/2013 Experience 

gain/loss 

New amortization base for the 10/1/2023 

Experience gain/loss 

New amortization base for the 10/1/2023 

Assumption change gain/loss 

$ 9,900,000 

33,000,000 

26,900,000 

$ (800,000) 

1,800,000 

1,400,000 

Normal Cost change - 1,900,000 

Total 

Employee Contribution change 

$ 69,800,000 

-

$ 4,200,000 

(100,000) 

73
 
Executive Summary

Summary of Results

Police Officers and Firefighters', and Teachers' Plans

1Throughout this report, former spouses receiving benefits under a qualified domestic relations order are not included in

counts. Their benefit amounts are included with their associated retired plan member.

Valuation Date

October 1, 2023 October 1, 2022

Plan Member Counts

Actives 430 567

Terminated Vested 240 260

Annuitants 12,780 13,042

Total 13,450 13,869

Contributions

Federal Required Contribution $ 659,400,000 $ 589,600,000

Present Value of Benefits (PVB)

Active Plan Members

Retirement Decrement $ 164,412,417 $ 188,015,325

Termination Decrement - -

Disability Decrement 473,029 608,695

Death Decrement 177,645 226,941

Total $ 165,063,091 $ 188,850,961

Inactive Plan Members

Normal Retirees1 $ 6,720,542,939 $ 6,478,696,504

Terminated Vested 37,560,508 39,511,106

Disabled Retirees1 651,436,268 649,529,509

Beneficiaries 926,060,576 855,563,209

Total $ 8,335,600,291 $ 8,023,300,328

Total PVB (inactive and active) $ 8,500,663,382 $ 8,212,151,289

Unfunded Actuarial Accrued Liability (AAL)

Active AAL $ 165,063,091 $ 188,850,961

Inactive AAL 8,335,600,291 8,023,300,328

Total AAL $ 8,500,663,382 $ 8,212,151,289

Asset Value as of Valuation Date $ (4,108,055,077) $ (3,991,603,721)

Unfunded AAL $ 4,392,608,305 $ 4,220,547,568
Executive Summary

Summary of Results

Judges' Plan

1Throughout this report, former spouses receiving benefits under a qualified domestic relations order are not included in

counts. Their benefit amounts are included with their associated retired plan member.

Valuation Date

October 1, 2023 October 1, 2022

Plan Member Counts

Actives 61 57

Terminated Vested - -

Annuitants 104 106

Total 165 163

Contributions

Government Contribution (excluding expenses) $ 26,200,000 $ 22,000,000

Present Value of Benefits (PVB)

Active Plan Members

Retirement Decrement $ 185,192,830 $ 150,387,774

Termination Decrement - -

Disability Decrement - -

Death Decrement ___________1,135,412 ___________863,254

Total $ 186,328,242 $ 151,251,028

Inactive Plan Members

Normal Retirees1 $ 220,896,705 $ 201,038,833

Terminated Vested - -

Disabled Retirees1 4,793,614 4,252,423

Beneficiaries 11,632,143 10,168,034

Total $ 237,322,462 $ 215,459,290

Total PVB (inactive and active) $ 423,650,704 $ 366,710,318

Unfunded Actuarial Accrued Liability (AAL)

Active AAL $ 90,636,006 $ 80,380,614

Inactive AAL 237,322,462 215,459,290

Total AAL $ 327,958,468 $ 295,839,904

Asset Value as of Valuation Date $ (206,059,441) $ (196,811,485)

Unfunded AAL $ 121,899,027 $ 99,028,419

Total Normal Cost $ 9,300,000 $ 7,400,000

Employee Contributions (700,000) (600,000)

Net Employer Normal Cost $ 8,600,000 $ 6,800,000
Executive Summary

Actuarial Valuation Opinion

This report presents the results of the actuarial valuation of the Program as of October 1, 2023. In our

opinion, this report is complete and accurate and represents fairly the actuarial position of the Program for

the purposes stated herein.

This actuarial valuation has been prepared based upon plan member data and plan provisions provided by

the Department of the Treasury as of May 1, 2023 (plan data was projected to September 30, 2023 by

adjusting for expected mortality for inactive plan members) and the estimated asset information projected

by the Department of the Treasury to September 30, 2023 (provided on August 10, 2023).

In FY 2023, a collective bargaining agreement was ratified that increased the future and historical salaries

for certain participants in the Police Officers and Firefighters' and Teachers' Plans. A factor was provided

developed based on the number of years retired to reflect the retroactive pay adjustment for those who

retired within the last four years. The historical salaries were also increased to reflect the retroactive pay

increase.

We have reviewed the data and other information provided for reasonableness, but have not independently

audited the data or other information provided. We have no reason to believe the data and other

information provided are not complete and accurate, and know of no further information that is essential to

the preparation of the actuarial valuation.

In our opinion, all costs, liabilities, rates of interest, and other factors underlying these actuarial

computations have been determined on the basis of actuarial assumptions and methods. Each are

reasonable (or consistent with authoritative guidance) for the purposes described herein taking into account

the experience of the plans and future expectations. Rates of interest used in this valuation are provided by

ODCP and are consistent with authoritative guidance. All other assumptions are reasonable for the

purposes described herein.

Future actuarial measurements may differ significantly from the current measurements presented in this

report due to such factors as the following:

• Plan experience differing from that anticipated by the economic or demographic assumptions;

• Changes in economic or demographic assumptions;

• Increases or decreases expected as part of the natural operations of the methodology used for these

measurements (such as the end of an amortization period or additional cost or contribution

requirements based on each plan's funded status); and

• Changes in plan provisions or applicable law.

Our scope did not include analyzing the potential range of such future measurements; therefore, this

analysis was not performed.

The undersigned with actuarial credentials collectively meet the Qualification Standards of the American

Academy of Actuaries to render the actuarial opinions contained herein.

This report was prepared solely for the benefit and internal use of the Department of the Treasury. This

report is not intended for the benefit of any other party and may not be relied upon by any third party for

any purpose, and Deloitte Consulting LLP accepts no responsibility or liability with respect to any party

other than the Department of the Treasury.

To the best of our knowledge, no employee of the Deloitte U.S. Firms is an officer or director of the

employer. In addition, we are not aware of any relationship between the Deloitte U.S. Firms and the

employer that may impair or appear to impair the objectivity of the work detailed in this report.

DELOITTE CONSULTING LLP

Jeffrey Rees, FSA, MAAA, FCA

Enrolled Actuary No. 23-05941

October 23, 2023

Michael de Leon, ASA, MAAA, FCA

Enrolled Actuary No. 23-06450

October 23, 2023