Frequently Asked Questions on the Civil Service Retirement and Disability Fund

March 16, 2015

1. What is the Civil Service Retirement and Disability Fund?

The CSRDF provides defined benefits to retired and disabled Federal employees covered 

by the Civil Service Retirement System.

2. How does the debt ceiling affect the CSRDF?

The CSRDF is invested in special-issue Treasury securities, which count against the debt 

limit. In 1986, Congress provided Treasury statutory authority to take certain actions in 

the event that the outstanding debt reaches the debt limit. Specifically, the statute 

authorizes Treasury to suspend investment of new amounts received by the CSRDF when 

the Secretary of the Treasury determines that additional investments cannot be made 

without exceeding the debt limit. In addition, Treasury can redeem a certain amount of 

existing investments held by the CSRDF when the Secretary of the Treasury determines

that a “debt issuance suspension period” exists.

3. What are the investments in the CSRDF that Treasury can redeem?

The statute governing the CSRDF gives Treasury authority to redeem existing Treasury 

securities held by the CSRDF in an amount up to the amount of civil service benefit 

payments authorized to be made from the CSRDF during the debt issuance suspension 

period. 

4. What is the length of the “debt issuance suspension period”?

Under the statute that governs the CSRDF, the term “debt issuance suspension period” 

means the period of time that the Secretary of the Treasury determines that Treasury 

securities cannot be issued without exceeding the debt limit. The determination of the 

length of the period is based on the facts as they exist at the time of the determination. 

The Secretary has determined that a debt issuance suspension period exists starting on 

March 16, 2015 and ending on July 30, 2015.

5. How much headroom will this redemption action regarding the CSRDF provide?

This redemption action provides approximately $27 billion in headroom under the debt 

limit.

6. What are the new investments in the CSRDF that Treasury can suspend?

The statute authorizes Treasury to suspend the investment of new amounts received by 

the CSRDF. New receipts include contributions from Federal employees and agency 

employers, as well as the interest payments on securities held by the CSRDF and the 

proceeds of maturing securities.
7. What impact will these actions have on Federal employees and their retirement 

benefits?

By law, the CSRDF will be made whole once the debt limit is increased. Benefits for 

retired and disabled Federal employees will not be affected by this action and will 

continue to be paid. Once the United States has exhausted the extraordinary measures it 

has available to preserve lawful borrowing authority without exceeding the debt limit, 

however, the U.S. Government will be limited in its ability to make payments across the 

government.

8. Has Treasury ever redeemed existing investments and suspended new investments 

in the CSRDF before?

Yes, in the past 20 years, Treasury used these extraordinary measures during previous 

debt limit impasses in 1995 – 1996, 2002, 2003, 2004, 2006, 2011, 2012-13, 2013, and 

2014.

9. How do these actions relate to the Postal Service Retiree Health Benefit Fund 

(PSRHBF)?

The Postal Accountability and Enhancement Act of 2006 requires that investments in the 

PSRHBF shall be made in the same manner as investments for the CSRDF. 

10. What are the new investments of the PSRHBF that can be suspended?

Currently, the PSRHBF does not have daily receipts or investments. On June 30, 2015, 

approximately $4 billion in PSRHBF investments mature and an interest payment of 

approximately $1 billion is scheduled to be made to the fund.

11. Does the fact that you’re declaring a debt issuance suspension period only through 

July 30, 2015 mean that Treasury will exhaust its extraordinary measures on July 

30, 2015?

The statute governing the CSRDF gives Treasury authority to redeem existing Treasury 

securities held by the CSRDF in an amount up to the amount of civil service retirement 

benefit payments authorized to be made from the CSRDF during the debt issuance 

suspension period. Under the statute that governs the CSRDF, the term “debt issuance 

suspension period” means the period of time that the Secretary of the Treasury 

determines that Treasury securities cannot be issued without exceeding the debt limit. 

The determination of the length of the period is based on the facts as they exist at the time 

of the determination. The Secretary has determined that a debt issuance suspension 

period exists starting on March 16, 2015 and ending on July 30, 2015. This 

determination does not preclude the Secretary from making a new determination at a later 

time with respect to the length of the debt issuance suspension period, including as the 

result of any consideration of changed circumstances.