Fiscal Year 

2021

DEPARTMENT OF THE TREASURY

OFFICE OF D.C. PENSIONS

ANNUAL

REPORT

DISTRICT OF COLUMBIA PENSIONS PROGRAM

MESSAGE FROM THE DIRECTOR 

December 2021 

On behalf of the Office of D.C. Pensions, I am pleased to present the Fiscal 

Year (FY) 2021 Annual Report, which provides highlights of the program’s 

significant accomplishments, as well as plans for upcoming years. 

Pursuant to the Balanced Budget Act of 1997, as amended (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, 2021, the District of Columbia Judicial Retirement and Survivors Annuity Fund, and 

the District of Columbia Federal Pension Fund held assets totaling $4.2 billion. During FY 2021, 

$792.7 million in benefit payments were processed for annuitants and beneficiaries, and 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. An independent public accounting firm rendered an unmodified 

opinion on the FY 2021 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 Office of D.C. Pensions and our service providers and business partners continued to enhance 

the System to Administer Retirement (STAR), our pension/payroll system. In FY 2021, the Office of 

D.C. Pensions executed the automation of STAR off-cycle payments and STAR annuitant selfservice to a pilot group. Enhancements are planned in FY 2022, which include the development of a 

tracking tool for debt and due process cases, and expansion of the annuitant self-service portal to all 

annuitants. In addition, other significant initiatives were executed this year: SharePoint, the Office’s 

document repository, was enhanced; and the Long-Term Business Planning project continued. 

The entire staff from the D.C. Pensions Program continued to demonstrate great resilience during the 

COVID-19 global pandemic where the interruption changed the work environment. The Office of 

D.C. Pensions staff continued to work in a remote work environment, which required tremendous 

flexibility and communication. With support from our service providers and business partners, the 

Office of D.C. Pensions continued to perform all program activities without interruption. The Office 

of D.C. Pensions continues to evaluate internal and external business processes to ensure the wellbeing of staff while exploring opportunities to enhance efficiency and effectiveness. 

The Office of D.C. Pensions 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 Act. 

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. Executive Summary ..........................................................................................................3

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

IV. Limitation of the Financial Statements ...........................................................................34

PART 2 INDEPENDENT AUDITORS’ REPORT 

Independent Auditors’ Report .........................................................................................37 

PART 3 FINANCIAL STATEMENTS AND NOTES 

Consolidated Balance Sheets ..........................................................................................43 

Consolidated Statements of Net Cost .............................................................................44 

Consolidated Statements of Changes in Net Position .....................................................45 

Combined Statements of Budgetary Resources ..............................................................46 

Notes to Financial Statements .........................................................................................47 

PART 4 REQUIRED SUPPLEMENTARY INFORMATION (Unaudited) 

Combining Statements of Budgetary Resources.............................................................63 

PART 5 OTHER INFORMATION (Unaudited) 

Consolidating Balance Sheets – By Fund .......................................................................67 

Consolidating Statements of Net Cost – By Fund ..........................................................68 

Consolidating Statements of Changes in Net Position – By Fund..................................69 

Schedule of Pension Expense – By Fund .......................................................................70 

Actuarial Valuation Report FY 2021 (Executive Summary) ..........................................71 
(This page intentionally left blank.) 
 

Management’s

Discussion and

Analysis

(Unaudited)

PART 1 

1 

MANAGEMENT'S DISCUSSION AND ANALYSIS

FISCAL YEAR 2021 (Unaudited)

Vision: 

The vision of the Office of D.C. Pensions is successful stewardship of the pension funds; high 

quality benefits administration services; and effective use of program resources, while fostering 

mutually beneficial relationships with our business partners at the District of Columbia, the 

Treasury’s Bureau of the Fiscal Service, and other Treasury entities. 

Mission: 

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. 

The responsibilities are to make timely and accurate benefit payments associated with the District 

of Columbia retirement programs for police officers and firefighters, teachers, and judges by 

managing investments, providing oversight and program management, and ensuring funding is 

available for future payments.

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 

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). 
2 

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. 

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, and program management. The Office 

coordinates with many District entities and stakeholders 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. Also, as of that date, the Office assumed 

benefit administration responsibility for the Judges’ Retirement Plan.

B. Organizational Structure and Staffing 

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

Human Capital Officer (DASHR/CHCO). The DASHR/CHCO reports to the Assistant 

Secretary for Management (ASM). The ASM reports through the Deputy Secretary to 

the Secretary. 

The Office fulfills its responsibility through key functional areas: Benefits 

Administration, Finance and Resource Administration, Information Technology Systems 

Administration, and Program Management. 

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

functions for certain District of Columbia retirement plans. The Office made

approximately $792.7 million in Federal and District benefit payments to annuitants

and beneficiaries for the year ended September 30, 2021.

 Finance and Resource Administration: The Office is responsible for ensuring

compliance with various financial laws and regulations. The Office provides

oversight for investments in Government Account Series (GAS) securities in the

federal pension funds totaling approximately $4.1 billion as of September 30, 2021.

The Office contracts with a third-party enrolled actuary to perform an annual actuarial

valuation to determine the pension liability of the retirement plans and the annual

contributions from the Treasury General Fund to the District of Columbia Teachers,

Police Officers and Firefighters Federal Pension Fund (D.C. Federal Pension Fund)
3 

and the District of Columbia Judicial Retirement and Survivors Annuity Fund 

(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 conducts

annual assessments of STAR security requirements to ensure compliance with the

Federal Information Security Management Act (FISMA). The Office continues to

utilize the STAR Change Control Board (CCB), first established in 2002, 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 also produces, analyzes, and acts

upon performance management information to continually improve operations.

As of September 30, 2021, the D.C. Federal Pension Fund and the Judicial Retirement 

Fund paid for 17 Treasury positions. In addition, the Office funds two positions in other 

Treasury offices performing critical functions to accomplish the Office’s mission. 

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. 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 and hosting for STAR and security support 

services which include FISMA compliance. 

II. Executive Summary

During Fiscal Year (FY) 2021, the Office of D.C. Pensions (the Office) successfully

worked with the District of Columbia Retirement Board (DCRB), the Treasury’s Bureau

of the Fiscal Service (Fiscal Service), Administrative Resource Center (ARC), and other

Department of the Treasury (Treasury) entities to execute responsibilities under the

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

The COVID-19 global pandemic interrupted and changed the way the Office operated.

In FY 2021, the Office continued to work in a remote operating environment. The Office

continued to execute its missions in a manner where staff, our service providers, and

business partners worked together in a 100% telework environment. This required

extensive coordination. The Office adapted and continued to perform all program

activities without interruption. The Office did not require or receive additional budgetary

resources to accommodate these challenges and there was no financial impact to
4 

annuitants who continued to be paid on-time. The Office received exceptional support 

from our service providers and business partners to continue to deliver results under these 

difficult circumstances. The Office continues to evaluate internal and external business 

processes to minimize program risks, ensure the well-being of staff, and explore 

opportunities to enhance efficiency and effectiveness. 

The Office Leadership Team supports long-term strategic planning with a focus on 

program oversight, quality management, risk management, and performance 

management. A team comprised of the Director, Senior Program Manager, Risk 

Manager, Assistant Director for Benefits Administration, Assistant Director for Finance 

and Resource Administration, and the Assistant Director for Information Technology 

Systems Administration, continued with a Long-Term Business Planning (LTBP) project 

to consider future program impacts and proactively assess those impacts. 

The Office continues to focus on promoting a program-wide perspective, maintaining an 

effective oversight and advisory role, optimizing benefits administration, enhancing 

System to Administer Retirement (STAR) operations and maintenance, and pursuing 

financial management and operational efficiencies. The following sections of the 

Management’s Discussion and Analysis provide more details about the FY 2021 program 

results and plans for future years. 

III. Strategic Goals, Objectives, Outcomes, Performance Measures 

and Results

The Office of D.C. Pensions (the Office) is a program that has the following three 

Strategic Goals: 

 

1. Office Strategic Goal: Effectively Managed Finances

Office Outcomes: 

 Benefit payments are accurate and timely 

 Pension funds are effectively invested 

 Pension funds are effectively managed 

 Pension funds meet future needs 

2. Office Strategic Goal: Management and Organizational Excellence

Office Outcomes: 

 Program is effectively managed 

3. Office Strategic Goal: Effective Quality Assurance Program

Office Outcomes: 

 Program creates continuous improvement 

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

Outcomes. It also identifies the Office’s Performance Measures and Results. 
Office of D.C. Pensions Strategic Goals, Objectives, Outcomes, Performance Measures and 

Fiscal Year 2021

Office Strategic Goals, Objectives, and Outcomes Office Performance Me

Results Office

Strategic Goals

EffectivelyManaged

Finances

Office

Strategic ObjectivesSkilled staff and technology are available to 

administer benefits

OfficeOutcomes

Benefit payments are accurate and timely

FY 2021 projected monetabenefit calculations

Target: 5% or less

Actual: 6.67% (See footno

STAR is available to users 

Target: 99% or more 

Actual: 99.95%

Skilled staff and funds are available to manage 

financial activities

Pension funds are 

effectively invested

FY 2021 investment strateg

Target: 100%

Actual: 100%FY 2022 investment strateg

timely

Target: September 24, 202

Actual: September 24, 202

Pension funds are 

effectively managed

FY 2021 minimum daily caexceeds the minimum balathe FY 2021 investment strTarget: 100%

Actual: 100%

FY 2021 annual contributio

Fund received timely into p

Target: September 28. 202

Actual: September 28, 202
Fiscal Year 2021

Office Strategic Goals, Objectives, and Outcomes Office Performance Me

Results Office

Strategic Goals

EffectivelyManaged

Finances(continued)

Office

Strategic ObjectivesSkilled staff and funds are available to manage 

financial activities (continued)

OfficeOutcomesPension funds are 

effectively managed 

(continued)

Monthly benefit payments 

by the fust business day of 

Target: 100%

Actual: 100%

Electronic benefit paymentannuitants as of September Target: 98.8%

Actual: 98.9%

Pension funds meet 

future needs

FY 2021 request for annua

General Fund prepared timTarget: September 24, 202

Actual: September 21, 202

Management

andOrganizational

Excellence

Skilled staff and management tools are 

available

Program is effectively managed

Risks are reviewed in acco

schedule outlined in the RiPlan

Target: Quarterly Meetings 

Actual: Quarterly MeetingFY 2021 financial statemereceived from an independ

Target: Unmodified opinio

Actual: Unmodified opinio
Fiscal Year 2021

Office Strategic Goals, Objectives, and Outcomes Office Performance Me

Results Office

Strategic Goals

Management

andOrganizational

Excellence

(continued)

Office

Strategic ObjectivesSkilled staff and management tools are 

available (continued)

OfficeOutcomes

Program is effectively 

managed (continued)

FY 2021 Annual Report an

Statements finalized 

Target: December 17, 2021 

Anticipated: December 17, FY 2021 Actuarial Valuati

timely

Target: September 21. 202

Actual: September 21, 202

Effective

Quality

Assurance

Program

Quality plans are operational in each area Program creates

continuous

improvement

FY 2021 Quality Assurancby September 30. 2021 

Target: 100%

Actual: 100%

Footnote:

1) The monetary error rate for FY 2021 showed a decrease from the 11.2% monetary error rate in FY 2020. Th

error rate may be attributed to training led by the Office targeted to address common causes of monetary errors._
A. Benefit payments are accurate and timely

1. Program Results

a. Benefits Administration

General Operations

Benefits administration services were provided to annuitants and beneficiaries in thr ee 

District of Columbia retirement plans: the Police Officers and Firefighters’ Retirement Plan, 

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

beneficiary population as of September 30, 2021, is as follows: teachers 5,593; police 

officers and firefighters 8,544; and judges 104.

The average monthly Federal and District benefit payments in FY 2021 was $66.1 million. 

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

benefits on the fir st business day of the month. With oversight and support by the Office, the 

District of Columbia Retirement Board (DCRB) performed benefits administration services 

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

The Office performed benefits administration for 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 Office encourages annuitants to receive their benefit payments through direct deposit, as 

it is a more convenient, secure, and timely method of delivering benefits. At the end of the 

fiscal year, the Electronic Funds Transfer (EFT) participation rate for annuitants in all 

retirement plans was 98.9 percent.
The table below illustrates the EFT participation rates for annuitants by retirement plan as of 

September 30:

District o f Colum bia R etirem ent Plans

Electronic Funds Transfer (EFT)

Participation Rate

FY 2021 FY 2020

98.7% 98.6%

99.1% 99.0%

Police Officers & Firefighters

Teachers

Judges 100.0% 100.0%

In FY 2021, a variety of outreach efforts continued to ensure that accurate and timely 

information was provided to annuitants, including:

Letters notifying annuitants when then benefits changed;

DCRB newsletters providing retirement plan information to active and retired police

officers, firefighters, and teachers;

Earning statement messages alerting annuitants to changes in benefits such as a cost-ofliving adjustments (COLA), informing annuitants of the opportunity to make changes to

the annuitant data (e.g., signing up for direct deposit, changing tax withholdings or

updating mailing addresses), and providing information regarding customer service

improvements;

Letters to retired judges providing information regarding the COLA effective

December 2020; and

Letters to retired judges announcing Federal Employees Dental and Vision Insurance

Programs (FEDVIP) and Federal Employees Health Benefits (FEHB) Program open

seasons.

Annuitant Payroll Operations

Pursuant to an Interagency Agreement (IAA) with the Treasury's Bureau of the Fiscal 

Service (Fiscal Service), Administrative Resource Center (ARC) Pension Payroll utilizes the 

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

supports benefit administration and annuitant payroll operations, to process monthly benefit 

payments. ARC Pension Payroll works closely with DCRB to process monthly benefit 

payments, and is responsible for reconciling the payroll reports generated from STAR to 

ensure the annuitant payroll is processed correctly.

In FY 2021, ARC Pension Payroll staff made 171,555 Federal and District benefit payments 

totaling approximately $792.7 million for a monthly average of $66.1 million. These 

monthly benefits represent payments for annuitants, beneficiaries, and Qualified Domestic 

Relations Orders (QDROs). In addition, off-cycle payments totaling approximately 

$678.5 thousand were paid to annuitants when benefits were not processed in time for the 

regular on-cycle schedule.
10 

During FY 2021, ARC Pension Payroll reported the share of Federal and District benefit 

payments. This information is calculated by STAR and is included in the Split 

Reimbursement Summary Report (SRSR). The SRSR 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. 

In FY 2021, the Office continued to focus on making accurate and timely payments. 

ARC Pension Payroll generates the Preliminary Statistics Report to conduct a preliminary 

review of the monthly payroll statistics before the close of pension processing. Meetings will 

continue to be held with the Office, DCRB, and ARC Pension Payroll to review the statistical 

data for consistency from month-to-month, percentage differences, large payment amounts to 

annuitants, and variations in the gross and/or net pay to individual annuitants. All identified 

anomalies will be explained, validated and/or corrected before the close of pension 

processing. 

Benefit Administration Activities and Projects 

During FY 2021, the Office continued to collaborate with DCRB to focus on key benefit 

activities and data integrity. In support of these efforts, the Office contracted with a 

consulting firm with experience in benefits administration to assist with benefit 

administration support activities. This allows the Office to have maximum flexibility to 

simultaneously execute various benefit activities and projects. 

Quality 

In FY 2021, the Office transitioned the monthly quality review of new and recalculated 

benefit payments from a contractor to Office staff. The Office restructured the Quality 

Assurance Forums for DCRB staff to occur quarterly, cover a broader spectrum of topics, 

and include DCRB staff participation in developing and delivering materials addressing the 

quality review process and filling in knowledge gaps. 

During FY 2021, the Office developed a quality management strategy for monitoring benefit 

administration activities. The strategy includes modifications to existing, and the 

introduction of new quality review activities. The Office also began development of a plan 

to implement the quality review strategy to begin in FY 2022. 

Judges Survivor Contributions 

In FY 2021, the Office discovered that Judges who elected the optional survivor benefit after 

they were appointed to the bench may not have made survivor contributions back to the date 

of appointment. In FY 2021, the Office coordinated with the D.C. Courts Human Resources 

Office to communicate with the affected Judges about their options. 
11 

Purchase of Service Installment Payments 

During FY 2021, the Office completed analysis of purchase of service installment payments 

that began prior to June 30, 1997 and were completed after that date. The installment 

payments made before June 30, 1997 will be transferred to DCRB. The Office is 

coordinating with DCRB to review the analysis. Once the review is complete, the Office 

expects to complete the transfer of funds in FY 2022. 

Off-Cycle Payments 

In FY 2021, the Office completed development and testing of automated Off-Cycle payments 

using STAR. The automated processing of Off-Cycle payments in STAR allows DCRB, 

ARC Pension Payroll, and the Office access to “real-time” payment information. 

Additionally, processing Off-Cycle payments in STAR minimizes the creation of 

overpayments that can be caused by the manual process. The Off-Cycle payments in STAR 

was implemented in November 2020. 

Summary Plan Description (SPD) 

The SPDs are designed to provide retirement plan members accurate and easy to understand 

information about the retirement plans. The SPDs are updated in five-year increments. The 

SPDs for the District of Columbia Teachers’ Retirement Plan and the District of Columbia 

Police Officers and Firefighters’ Retirement Plan are scheduled to be updated in 2022. The 

District of Columbia Judges’ Retirement Plan SPD is scheduled to be updated in 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. The Office is working with 

DCRB to analyze the data to identify the former District employees who may be entitled to a 

deferred benefit or refund of retirement contributions. Once the population has been 

identified, the Office and DCRB will collaborate to determine the necessary next steps. 

STAR Annuitant Self-Service 

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

Annuitant Self-Service functionality in the STAR system. In the past, annuitants were 

required to submit a request in writing for information about their benefit or to make changes 

to their retirement records. To make the process more efficient for annuitants and staff, the 

Annuitant Self-Service functionality will allow annuitants of the retirement plans to have 

access to the certain retirement information maintained in STAR. The self-service 

functionality will allow annuitants an opportunity to view and edit certain information. 

Allowing annuitants to view and, in some cases, make changes to their information will make 
12 

it easier and more convenient and reduce the level of effort required for DCRB and the 

Office. 

As part of the implementing the Annuitant Self-Service functionality, the Office utilized 

Treasury’s Office of the Chief Information Officer (OCIO) contract with ID.me. ID.me is a 

private company which provides multi-factor authentication services and a complete online 

identity verification process. Annuitants must first create an ID.me account to verify their 

identity. After the ID.me account is created, annuitants can safely and securely access STAR 

to view and make certain changes to their information. 

The self-service functionality was implemented in July 2021 with a limited population of 

approximately 600 annuitants. In FY 2022, DCRB and the Office will evaluate the impact to 

determine how and when to allow access to a larger population of annuitants. 

Training and Resources 

In FY 2022, the Office will evaluate replacements for the User Productivity Kit (UPK), 

which is the repository for help documentation in STAR. Included in the evaluation for a 

replacement will be plans for assessing the current content and the ongoing management of 

STAR help documentation. A replacement for UPK will ensure ongoing support after 

December 2022. The Office will continue assessing training requirements to ensure skills 

and knowledge exists to effectively manage and execute benefits administration activities. 

Data Tool 

In FY 2022, the Office will work on the 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 data tool is expected to be delivered in 

time for the FY 2022 actuarial valuation. 

b. System to Administer Retirement (STAR)

Background and History 

STAR is an automated 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, pensions, and payroll administration. The STAR implementation was 

phased and deployed in bundles known as releases. 
13 

 Release 1 was implemented in December 2002 to serve all annuitants of the Judges’

Retirement Plan.

 Release 2 was implemented in September 2003 to serve teachers, police officers, and

firefighters who retired on or before June 30, 1997, and their survivors.

 Release 3 was deployed in August of 2005 for teachers, police officers, and firefighters

whose initial retirement was processed in STAR after August 1, 2005 (and their

survivors). This release also converted teachers, police officers, and firefighters who

retired after July 1, 1997, and before August 1, 2005, and whose initial retirement

processing took place in the District’s legacy system, the Pension Administration and

Payroll System (PAPS).

 Release 4 started the implementation of the split benefit calculation to enable STAR to

calculate the Federal and District share (split) for benefit payments. Release 4 was

implemented in June 2007 to calculate the split for future payments to those annuitants

who were brought into pay status on or after June 4, 2007. This release also included an

upgrade of Oracle/PeopleSoft from version 8.0 to 8.9.

 Release 5 was implemented in November 2007 and completed the implementation of the

split benefit calculation. The split was calculated for future benefit payments to

annuitants whose initial retirement processing took place in STAR between August 2005

and June 2007. In addition, STAR calculated the split for the future benefit payments to

annuitants who retired after June 30, 1997, and whose initial retirement processing took

place in PAPS.

 Release 6 was deployed in May 2012, which upgraded the Oracle/PeopleSoft version

8.9 to version 9.1, and included the implementation of the “person model.” The upgrade

leveraged existing and newly delivered functionality to reduce the overall number of

Oracle/PeopleSoft application customizations.

 Release 7 was deployed in April 2017, which upgraded the Oracle/PeopleSoft version

from 9.1 to version 9.2. The 9.2 upgrade introduced a new model for future upgrades.

STAR Highlights 

After the implementation of STAR Release 7, the Office has continued an ongoing effort to 

maintain the system’s operational integrity and look for opportunities to make positive 

system enhancements. 

In FY 2021, the Office made the following enhancements to STAR: 

 The Automation of Off-Cycle payments was implemented in November 2020.

 The Piloting of Annuitant Self-Service was implemented in July 2021.

In FY 2022, the Office will be working on the following changes to STAR: 

 Performing an upgrade to software used by the developers called PeopleTools.

 Beginning enhancements to add additional capabilities to the Annuitant Self-Service

functionality.

 Beginning requirements identification and development of the Debt and Due Process

Tracking Tool.
14 

 Evaluating replacements for the User Productivity Kit (UPK), which is the repository for

help documentation.

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 production support activities, including routine system operations, application and 

database administration, help desk operations, and problem resolution. A supplemental 

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

maintenance activities. In FY 2021, STAR was available 99.95 percent of the time. 

As part of the Annuitant Self-Service implementation, many changes to the hosting 

environment were required. In May-June of 2021, STAR’s underlying operating system, the 

COBOL complier, and PeopleTools software were updated. In July 2021, STAR’s database 

hardware was updated to Fiscal Service’s Exadata platform. The new database hardware is 

specifically designed for databases and improves the overall STAR processing performance. 

Another PeopleTools update is planned for FY 2022 in order to maintain the Oracle support 

services. 

STAR System Security 

In FY 2021, as a part of the Security Assessment and Accreditation (SA&A) process, the 

Office conducted a full security assessment of the STAR system. The SA&A is a process 

that ensures that federal systems are well-documented, authorized to operate, and adhered to 

formal and established security requirements. A full security assessment is required every 

three years following a system’s Authorization to Operate (ATO) or when security-relevant 

changes occur which constitute a 'significant change' necessitating a new ATO. 

The full security assessment was conducted following the implementation of the new STAR 

Annuitant Self-Service functionality and the decision to shift the posture of STAR from nonpublic facing to public facing. The assessment was conducted for both the then non-public 

facing STAR environment and newly developed public facing STAR environment that 

includes the new Self-Service functionality. There were seventy-five vulnerabilities 

identified during the assessment and an additional eight vulnerabilities identified in a selfassessment that was conducted after STAR’s posture was shifted to public-facing but prior to 

its’ go-live. Of the eighty-three total vulnerabilities: thirty-six have been identified as false 

positive; nine have been risk accepted due to their impact to STAR, if fixed; thirty-one have 

been mitigated – six of which were addressed as part of the STAR Annuitant Self-Service 

enhancement; and lastly, seven were found on the legacy servers and did not warrant 

mitigation once STAR was move to the new environment. The next assessment for STAR 

will be an annual assessment since it will be the first of the three years following the latest 

ATO. It is scheduled for FY 2022. 

STAR security management adheres to the Federal Information Security Management Act 

(FISMA) calendar year which starts July 1 and ends June 30. As required by National 
15 

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

Systems and Organizations (NIST 800-53 Rev. 4), the Office conducted the second 

scheduled FISMA required backup data test from FISMA year 2020, a contingency test, and 

the first of two backup data tests for FISMA year 2021. 

 The second backup test again consisted of testing the data mirroring process between the

STAR Production and STAR Contingency sites. Data mirroring refers to the real-time

operation of copying data, as an exact copy, from one location to another location. This

test successfully validated the mirroring process between STAR Production and STAR

Contingency.

 The contingency test again consisted of testing remote access through the Treasury,

Departmental Offices Remote Access (DORA) connection to the STAR Contingency

site. This test successfully validated remote connectivity to the STAR Contingency site

via DORA.

 The first information system backup exercise for FISMA year 2021 consisted of testing

the reliability and integrity of backup data from one of STAR’s schedule system backups.

This test successfully validated the integrity of STAR backup files.

 The second information system backup exercise is scheduled to be conducted in

March 2022.

In FY 2021, the Office also conducted its annual incident response exercise that consisted of 

conducting a dry run of the STAR recovery process. These procedures are meant to 

reestablish STAR following a security incident. With STAR now public facing, the exercise 

identified the need for the Office to consider messaging and communicating to annuitants 

when an incident occurs. In FY 2022, the Office plans to update the PII incident Response 

Plan. 

Lessons learned from all the tests/exercises are used to update STAR security documentation. 

In addition to updating STAR security documentation after the above-mentioned 

tests/exercises, STAR security documentation is reviewed and updated prior to each security 

assessment. 

STAR Change Control Board 

The Office’s STAR Change Control Board (CCB) acts as the approving authority for all 

STAR requirement changes. The Board is comprised of representatives from the Office, the 

Office of General Counsel (OGC), DCRB, Fiscal Service ISS, and ARC Pension Payroll. 

The CCB evaluates the benefits and risks associated with any proposed change, makes a 

determination as to whether the proposed change should be implemented, and establishes the 

priority for each approved change. 

In FY 2021, the Office has undertaken an update to the STAR Change Control Plan, which 

establishes the STAR Change Control Board and defines its mission, roles, responsibilities, 

and processes. The updated STAR Change Control Plan will incorporate the STAR Change 

Control Charter into one consolidated document. Updates to the STAR Change Control Plan 

are being coordinated with DCRB and will be presented to the CCB for vote in FY 2022. 
16 

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

1. Program Results 

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 

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, 2021 are $4.0 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 Judicial Retirement Plan. There are three funding sources 

for the Judicial Retirement Fund: 

 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, 2021 are $190.3 million. 

To ensure the Office achieves its strategic goal #1 (Effectively Managed Finances), our Risk 

Management Program tracks several risks related to the stated objective, “pension funds meet 

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

These risks have been evaluated and categorized as low. 
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, with maturities and par amounts consistent with the expected 

payment dates and payout amounts of the pension liabilities.

The table below reflects FY 2021 and FY 2020 annual payments from the Treasury General 

Fund as of September 30:

O ffice o f D.C. Pensions’ Funds

Annual Payments from the

Treasury General Fund

(in Millions)

FY 2021 FY 2020 $ Change

District of Columbia Federa1 Pension Fund $576.5 $540.0 $36.5

District o f Columbia Judicial Retirement and

Survivors Annuity Fund $18.7 $16.0 $2.7

Totals $595.2 $556.0 $39.2

A major component of each of the above 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 six years remaining of these 30-year payments of $348.6 

million for 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.

The year-to-year differences in the annual payments from the Treasury General Fund are 

driven primarily by the amortization of actuarial gains or losses in the current year, the 

continued impact of amortizations scheduled from previous years, and the completion of 

some prior year amortizations reaching the end of their applicable amortization period.
Interest

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

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

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

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

premiums and discounts from GAS securities while 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 2021 and FY 2020 annual interest as of September 30 from the pension 

funds are summarized in the following tables:

Office o f D.C. Pensions’ Funds

FY 2021 Annual Interest

(in M illions)

Interest

Payments

(deposits)

Interest

Earned

(recognized)

Rate of

Return

District of Columbio Federal Pension Fund $ 7 1 .5 $ 5 6 .0 1 .5 8 %

District of Columbia Judicial Retirement and

Survivors Annuity Fund $ 3 .6 $ 3 .4 1 .9 4 %

Totals $75.1 $59.4

Office o f D.C. Pensions’ Funds

FY 2020 A nnual Interest

(in M illions)

Interest

Payments

(deposits)

Interest

Earned

(recognized)

Rate of

Return

District of Columbia Federal Pension Fund $81.8 $65.1 1.84%

District of Columbia Judicial Retirement and

Survivors Annuity Fund $3.8 $3.6 2.14%

Totals $ 8 5 .6 $ 6 8 .7

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

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

at the time investments are placed.

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.
The table below summarizes the contributions of active judges’ contributions for the most

recent fiscal years as of September 30:

Office o f D.C. Pensions’ Fund

Employee Contributions

from Active Judges

(in Thousands)

FY 2021 FY 2020 $ Change

District of Columbia Judicial Retirement and

Survivors Annuity Fund $625.5 $664.8 $(39.3)

Summary of Fund Deposits

The following table reflects the fu n d deposits to the D.C. Federal Pension Fund and the 

Judicial Retirement Fund as of September 30:

Office o f D.C. Pensions’ Funds

(in M illions)

Fund Type of Deposit

District of Columbia

Federal Pension Fund

FY 2021 FY 2020

$576.5 $540.0

$71.5 $81.8

$245.9 $225.7

$23.0 $21.2

$3.0 $1.7

District of Columbia

Judicial Retirement and

Survivors Annuity Fund

$18.7 $16.0

$3.6 $3.8

$0.6 $0.7

Totals

$595.2 $556.0

$75.1 $85.6

$0.6 $0.7

Warrant

Interest

District Benefit Payments

Post-1987 D.C. Health & Life 

Employer Payments

STAR Administrative Expense 

Reimbursements *

Warrant

Interest

Employee Contributions

Warrant

Interest

Employee Contributions

Reimbursements and Payments $271.9 $248.6

*FY 2021 includes five quarters of reimbursement payments collected; while FY 2020

includes three quarters.
c. Collections

District Benefit Payments

Treasury pays all 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 STAR Split Reimbursement 

Summary Report supports DCRB reimbursements made to Treasury each month.

The table below summarizes reimbursement activity for the most recent fiscal years as of 

September 30:

O ffice o f D.C. Pensions’ Fund

District Benefit Paym ents

i(n M illions)

FY 2021 FY 2020 $ Change

District of Columbia Federal Pension Fund $245.9 $225.7 $20.2

DCRB’s advances of the District 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

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.

The table below summarizes reimbursement activity for the most recent fiscal years as of 

September 30:

O ffice o f D.C. Pensions’ Fund

D.C.

Insurcean

H ealth and L ife 

 Paym ents

i(n M illions)

FY 2021 FY 2020 $ Change

District of Columbia Federal Pension Fund $23.0 $21.2 $1.8

The District’s advances of the 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. Applying this methodology, the Office 

and DCRB entered into a cost sharing agreement for reimbursement of FY 2021 actual 

expenses.

The following table summarizes STAR administrative expense reimbursements for the most 

recent fiscal years as of September 30:

STAR

A dm inistrative Expense

O ffice o f D.C. Pensions’ Fund Reim bursem ents

in M illions)

FY 2021* FY 2020 $ Change

District of Columbia Federal Pension Fund $2.5 $2.3 $0.2

* Amount includes a receivable of $625 thousand for the fourth quarter of FY 2021.

The year-to-year increase in the reimbursements for STAR administrative expenses are 

driven primarily by increases of DCRB share of the Office’s STAR administrative costs 

provided by contractors and service providers. The combined effect of DCRB’s increased 

share along with slightly increased STAR administrative expenses incurred by the Office 

accounts for the year-to-year increase.

Debt Management

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

Office. During FY 2021, the Office collaborated with ARC Pension Payroll, OGC, and 

DCRB to pursue debt prevention and collection efforts. The Office recovered approximately 

$1.2 million after notification of annuitant deaths. In addition, $106.3 thousand was 

collected through offsets, lump sum payments, or installment payments.

The Office has an agreement with the Fiscal Service DMS Cross-Servicing Program. The 

FY 2021 agreement allows collection processes for delinquent debt through several tools 

including issuing demand letters, conducting telephone follow-up calls, referring debts for 

administrative offset, performing administrative wage garnishment, and referring debts to 

private collection agencies.

Dining FY 2021, the Office, ARC Pension Payroll, and DCRB began work on the 

development of the Debt and Due Process Tracking Tool (DDPTT). This tool will reside in 

STAR to track and report debt and benefit due process cases. The DDPTT will provide a 

single platform for managing and tracking debt and benefit due process case information
22 

from initiation through resolution. Currently, all tracking of debt and due process cases is 

done outside of STAR and requires manual reporting, tracking, and communication between 

offices. The ability for each organization to instantly access the status of a debt or due 

process case will benefit all organizations. In FY 2022, the Office will begin identifying 

requirements and STAR development of the DDPTT. 

d. Federal Investments

As required by the Act, amounts received in the D.C. Federal Pension Fund and the Judicial 

Retirement Fund are invested in non-marketable securities issued to mirror the characteristics 

of marketable securities. The Fiscal Service invests the assets of the D.C. Federal Pension 

Fund and the Judicial Retirement Fund based on investment guidance from the Office. The 

Office follows a “ladder” approach, scheduling maturities in amounts sufficient to meet the 

obligations to pay benefits and administrative expenses projected by annual actuarial 

valuations. Investment policy in the D.C. Federal Pension Fund and the Judicial Retirement 

Fund strikes a balance between ensuring the Office can meet short-term obligations and 

extending the ladder. 

In FY 2021, the cash balances in the D.C. Federal Pension Fund and Judicial Retirement 

Fund, available for contingencies, were targeted to remain above $95.0 million and 

$2.6 million, respectively, which represent approximately two months of federal obligations. 

Typically, the Office invests the cash balance in one-day certificates, except for an uninvested balance of $500 thousand at month-end to cover unanticipated withdrawals on the 

last day of the calendar month. 

By the end of FY 2021, the Office held securities with maturity dates in the D.C. Federal 

Pension Fund which extended to May 2028, and held securities in the Judicial Retirement 

Fund with maturity dates which extended to August 2031. Similar to the prior year, the 

Office also invested a portion of the FY 2021 warrant for the Judicial Retirement Fund in a 

bond with a February 2036 maturity date. The Office normally invests in 10-year notes with 

maturities selected to immunize the funds’ projected future benefit payments, but available 

funds from the FY 2021 warrant exceeded the securities available with this profile. The 

Office will return to investing in 10-year notes for the Judicial Retirement Fund as they 

become available. 

Federal Investments are valued at cost, and, if applicable, adjusted for unamortized premiums 

and discounts. The premiums and discounts are recognized as adjustments to interest 

income, utilizing the effective interest method. 
The following table reflects the federal investments breakdown as of September 30 for the 

two most recent years:

Office o f D.C. Pensions’ Funds

Federal Investm ents

(in M illions)

FY 2021 FY 2020 $ Change

District of Columbia Federal Pension Fund $3,957.4 $3,875.0 $82.4

District o f Columbia Judicial Retirement and

Survivors Annuity Fund $189.7 $182.2 $7.5

Totals $4,147.1 $4,057.2 $89.9

To ensure the Office achieves its strategic goal #1 (Effectively Managed Finances), our Risk 

Management Program tracks risks directly related to the stated objective, “pension funds are

effectively invested’ for both the D.C. Federal Pension Fund and the Judicial Retirement 

Fund. These risks have been evaluated and categorized as low.

e. Payments

Federal Benefit Payments

Treasury pays all federal benefit payments under the Police Officers and Firefighters’, 

Teachers’, and Judges’ Retirement Plans.

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

Office o f D.C. Pensions’ Funds

Federal Benefit Paym ents

(in M illions)

FY 2021 FY 2020 $ Change

District of Columbia Federal Pension Fund $533.2 $539.3 $(6.1)

District of Columbia Judicial Retirement and

Survivors Annuity Fund $0.6

Totals

$15.0 $14.4

$548.2 $553.7 $(5.5)

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 portion of those refund 

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

requested.
The table below summarizes the refunds of employee contributions processed as of

September 30:

Office o f D.C. Pensions’ Funds

Refunds o f Federal Portion

o f Em ployee Contributions

(in W hole Dollars)

FY 2021 FY 2020 $ Change

District of Columbio Federal Pension Fund $26,523 $53,813 $(27,290)

The year-to-year difference in the District of Columbia Federal Pension Fund refunds is 

driven by year-to-year differences in employee terminations.

Benefit Administration Expense Reimbursements

The Office reimburses DCRB for administrative expenses incurred in administering Federal

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

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

District benefit payments and entered into a cost sharing agreement for reimbursement of 

FY 2021 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 supporting the benefits

administration function; and (4) the level of effort associated with processing Federal benefit 

payments.

The table below is an estimate of the amounts the Office expects to reimburse DCRB as of 

September 30 for FY 2021 administrative expenses incurred while administering Federal 

benefit payments; and the actual reimbursement for FY 2020:

Office o f D.C. Pensions’ Fund

R eim burtsenm

Adminitsreav

 to DCRB for

 Expenses

i(n M illions)

FY 2021* FY 2020 $ Change

District of Columbia Federal Pension Fund $3.6 $3.0 $0.6

*Amount includes estimated fourth quarter 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 

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 ninety-five 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 fu n d. When expenses benefit only one group, 

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 benefit

administration and IT system support.

The following table reflects administrative expenses by fu n d for two most recent fiscal years

ending September 30:

Office o f D.C. Pensions’ Funds

Admin istrative Expenses

i(n M illions)

FY 2021 FY 2020 $ Change

District of Columbio Federal Pension Fund $19.9 $22.9 $(3.0)

District of Columbia Judicial Retirement and

Survivors Annuity Fund $0.5 $0.5 $0.0

Totals $20.4 $23.4 $(3.0)

In FY 2021, 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 non-exempt budget account with direct spending.

Based on this report, the Office identified the District of Columbia Federal Pension Fund and 

the District of Columbia Judicial Retirement and Survivors Annuity Fund as budget authority

subject to sequestration. Although reductions due to sequestration had no impact on 

payments to annuitants, the Office absorbed these reductions in FY 2021 in the area of 

administrative expenses by managing the timing of approved hiring actions, monitoring the 

funding of contract actions, and planned projects.
The table below summarizes these reductions for the two most recent fiscal years as of 

September 30:

Fund Paym ent Type

Sequestration Im pact

(in M illions)

FY 2021 FY 2020 $ Change

District of Columbia Federal

Pension Fund

Annuitant Benefit 

Payments $0.0 $0.0 $0.0

Administrative

Expenses $1.4 $1.4 $0.0

District of Columbia Judicial

Retirement and Survivors

Annuity Fund

Annuitant Benefit 

Payments $0.0 $0.0 $0.0

Administrative

Expenses $0.1 $0.1 $0.0

Total Reduction due to Sequestration $1.5 $1.5 $0.0

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

the Office will continue to be subject to sequestration reductions until 2029 per the Bipartisan

Budget Act of 2019 (Public Law 115-123 Division C, Title I, Sec. 30101), and will comply

with implementation guidance issued by OMB and the Department of the Treasury.

Payment Integrity Information Act of 2019 (PILA)

OMB Circular A-123 Appendix C, Requirements for Payment Integrity Improvement,

requires agencies to periodically review all programs and activities and identify those that 

may be susceptible to significant improper payments. An improper payment is defined as 

any payment that should not have been made or that was made in an incorrect amount under 

statutory, contractual, administrative, or other legally applicable requirements. Incorrect

amounts are overpayments, underpayments, or duplicate payments that are made to eligible 

recipients. An improper payment also includes any payment that was made to an ineligible 

recipient or for an ineligible good or service, or payments for goods or services not received 

(except for such payments authorized by law). Agencies are required to annually report

amounts and causes of improper payments to the President and Congress, and their plans for 

monitoring and reducing improper payments.

In FY 2021, the Office worked with ARC to analyze the various types of payments disbursed 

by the Office and reported these results using a standardized, risk-based model.

Additionally, the Office reported and reviewed results from ongoing internal benefit payment 

quality reviews. With these efforts, the Office exceeded the 85% annual recapture payment 

target for Treasury at 89.05%. The Office will continue to work with Treasury’s Office of 

the Deputy Chief Financial Officer (ODCFO) to comply with OMB Circular A-123 

Appendix C reporting requirements.
27 

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 63 invoice payments by electronic funds transfer and incurred no Prompt Pay 

Act interest expense. 

f. Financial Operations

Accounting Support 

Pursuant to an IAA with ARC, ARC Fiscal Accounting provides accounting support services 

that include processing accounting transactions such as commercial invoices, purchase cards, 

obligations, accruals, and revenue transactions. Transaction processing consists of a full 

range of accounting transactions necessary to maintain a complete general ledger, including 

budgetary transactions, accounts payable, accounts receivable, and fixed assets. ARC Fiscal 

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

to record and process financial transactions. The Office’s transactions are entered into 

Oracle, both manually and via custom interfaces, from ancillary systems such as Procurement 

Request Information System Management (PRISM) and Concur Government Edition (CGE). 

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 Fiscal Accounting also prepares the Office’s financial 

statements and other useful data for managerial reporting. ARC Fiscal Accounting provides 

a report writer package called Oracle Business Intelligence (OBI), which allows the Office to 

generate various accounting reports to monitor obligations and expenditures. 

In FY 2021, ARC implemented a cloud-based solution named OneStream. OneStream is 

designed to streamline the financial reporting process and provide data analytics functionality 

while improving management’s visibility and controls. Earlier in the fiscal year, the Office 

participated in a walk-through and testing of the OneStream solution. The Office noted that 

reconciliations and tie-points relied on by ARC were streamlined and automated. The Office 

is currently provided access to read-only Excel output from OneStream delivered to an OMB 

MAX collaboration site. In FY 2022, the Office will work with ARC to ensure that the 

recent August 2021 updates to OMB Circular A-136, Financial Reporting Requirements, and 

the Treasury Financial Manual are incorporated in OneStream. 

g. Actuarial Valuation

In FY 2021, 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 2022 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 2021. The actuarial accrued liability was determined using the demographic rates 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. 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.

Office o f D.C. Pensions’ Funds

A ctuarial A ccrued Liability

(in M illions)

FY 2021 FY 2020 $ Change

District of Columbia Federal Pension Fund $7,778.8 $8,050.5 $(271.7)

District of Columbia Judicial Retirement and

Survivors Annuity Fund $276.4 $267.9 $8.5

Total Actuarial Accrued Liability $8,055.2 $8,318.4 $(263.2)

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

gains and losses associated with demographic experience and changes in demographic and 

economic assumptions.

Other key results from the Actuarial Valuation Report can be found on page 71 of this 

Annual Report.

C. Program is effectively managed and creates continuous improvement

1. Program Results

a. Leadership Team

In FY 2021, the Office Leadership Team composed of the Office Director, the Assistant 

Director for Benefits Administration, Assistant Director for Finance and Resource 

Administration, Assistant Director for IT Systems Administration, and the Senior Program 

Manager focused on major external deliverables in addition to execution and impact of crossfunctional/organizational activities. Meetings between the Office Leadership Team and their 

DCRB counterparts take place to ensure alignment of major operational activities and timely 

creation of and adherence to Memoranda of Understanding, Service Level Agreements, and 

Quality Plans.

b. Multi-Year Planning

In FY 2021, the Office Leadership Team continued to focus attention on major functional 

areas and activities assessed as having longer term and multi-entity impact. The Leadership 

Team tracked the performance indicators to ensure that the Office and its business partners 

made progress toward achieving the results contemplated in the Office Multi-Year Plan. In 

FY 2022, the Leadership Team will review the Multi-Year Plan to determine if the
29 

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

appropriate emphasis is reflected in order to achieve optimal results. 

c. Long-Term Business Planning

The Long-Term Business Planning (LTBP) project began in FY 2018 to consider potential 

future program impacts and proactively assess those impacts. During FY 2021, the team 

continued to address areas outlined on the “roadmap” which was developed in FY 2018 and 

updated in FY 2021. The “roadmap” will guide leadership with determining the appropriate 

timing and circumstances for future decision making and for the creation of actionable 

activities. In FY 2022, the Office will continue to determine an approach to address items 

outlined in the “roadmap.” 

d. Program Management

A key component of program management involves setting the Office’s annual project 

activities and major priorities. 

In FY 2021, the Office reviewed and updated the Department of the Treasury, DO .214DC 

Pensions Retirement Records system of records which is referred to as the System of Records 

Notice (SORN). The Office’s SORN provides public notice of the records it maintains about 

individuals which are retrieved by personal identifier. The Office submitted the updated 

SORN to Treasury’s Office of Privacy, Transparency, and Records (PTR) for review. PTR 

coordinated with internal Treasury offices and provided the SORN to OMB, for review and 

clearance. After incorporating comments, Treasury published the Department of the 

Treasury, DO .214-DC Pensions Retirement Records system of records in the Federal 

Register on March 9, 2021. 

e. Service Level Agreements

The Office has annual Service Level Agreements (SLAs) in place with Fiscal Service, ARC 

for the STAR administration and hosting, and annuitant payroll operations. In FY 2021, the 

SLAs were reviewed and revised to more accurately define responsibilities, required 

services, and reporting requirements for service providers and to ensure the Office is 

providing high quality service to annuitants. 

In FY 2021, the Office collaborated with DCRB to develop a robust SLA to ensure a 

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

FY 2022 and FY 2023. 

f. Quality Program

Benefits Administration 

As part of the Office’s Quality Program, a quality plan guided the review of benefit 

administration activities. In FY 2021, the Office transitioned the quality review activities 
30 

from the benefits administration contractor to the Office’s staff. The transition activities 

included the development of reference guides to assist with quality review. The Office’s 

staff and benefits administration contractor focused reviews on payment types and data 

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

historically high error rates. The Office engaged DCRB in discussions to improve the quality 

of work performed by DCRB. 

In FY 2021, the Office developed a quality management strategy for monitoring benefit 

administration activities. The strategy includes recommendations to modify existing quality 

review activities and the introduce new quality review activities. The Office also began 

development of a plan to implement the recommendations in the quality review strategy to 

begin in FY 2022. 

Annuitant Payroll Administration 

The Office’s Quality Program includes reviews of annuitant payroll processing functions. 

The Office reviews preliminary and final payroll statistics, large annuitant payments, offcycle payment requests, and third-party payroll reporting. In addition to the aforementioned 

reports, each month the Office monitors death audit verification, that includes reviewing 

obituaries provided by the vendor, Do Not Pay (DNP) notifications, pending issues escalated 

for resolution, checks which have not been cashed for an extended period of time, payment 

reclamations, and returned mail. 

Information Technology Systems Administration 

During FY 2021, the Office continued to include system administration activities and the 

review of user accounts in its Quality Program. 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 are reviewed semi-annually to ensure that users 

have the least amount of access privileges necessary to perform their duties. The semiannual reviews are used by the Office to manage resources, maintain system security, and 

track the quality of STAR production support and hosting services. Additionally, in 

FY 2021, the Office continued the monthly active account verification reviews to ensure 

departing employee accounts were locked/terminated in a timely manner. 

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

In FY 2021, 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 are reported and reviewed during the Office’s 

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

management areas, such as operational planning and resource needs assessments. 
31 

h. Capstone Project 

During FY 2021, the Office reviewed its email records management practices. Consistent 

with the rules set out by PTR and the National Archives and Records Administration 

(NARA), Microsoft Outlook email inboxes with email records were inventoried. The 

Office’s staff and contractors treated email messages created or received during official 

business with due regard for records management policies. The C2

 approach 

(Clean x Categorize) was developed to guide the Office’s email management practices. 

In FY 2021, Treasury’s Office of the Chief Information Officer (OCIO) integrated 

technologies, part of which includes an update of MS Office suite to MS Office 365. 

Capstone email retention was added to MS Outlook which includes automatic records 

retention/disposition dates. The Office is in ongoing discussion with OCIO and PTR to find 

the best approach to continue managing email records. The Office is committed to ensuring 

safe preservation of all emails determined to be Federal records. 

i. Records Management Project 

During FY 2021, the Office began a Records Management Project. The scope of the work is 

to assess, design, initiate, and execute a records management strategy for the Office that 

achieves compliance with OMB, NARA, and PTR guidance. This effort will assess 

documents, records, and systems across the Office in various formats including paper, 

electronic, and email. 

 

In FY 2022, the project will include developing a recording management strategy with 

supporting technology requirements. This also includes developing a “roadmap” that defines 

major milestones for completing the records management project and maintaining future 

records, a records management governance plan that provides a program vision and 

framework, and a change management plan to assist with the implementation of the records 

management solution. 

j. SharePoint Project 

The Office continued to capitalize on the benefits of the FY 2019 SharePoint upgrade and redesign while working remotely during the COVID-19 global pandemic. The Office was able 

to operate with minimal disruption due to the conversion to a SharePoint-centric operational 

model. 

In FY 2021, the Office redesigned the Benefits Administration functional area of SharePoint. 

The change in structure was needed to enhance collaboration, support new work activities 

performed by the Office’s staff, and improve the organization of materials. The Office’s 

staff received training on the new design and functionality. 

In FY 2022, the Office will continue to enhance and evaluate opportunities to expand the use 

of SharePoint. The Office plans to use SharePoint as the baseline for the office-wide records 

management project and platform for electronic document management. 
32 

k. Risk Management Program 

In FY 2021, the Office Leadership Team worked with the Risk Manager to review and make 

recommendations to revise the Risk Management Program. The Office has taken a proactive 

approach of developing and nurturing a risk-aware culture by integrating program and fraud 

control activities into its daily operations. The Office developed the Fraud Risk Management 

Framework to expand upon the Summarized Fraud Management Overview. The framework 

will be included in the Risk Management Plan in FY 2022. 

l. Emergency Preparedness 

In FY 2021, the Office updated its Continuity of Operations Plan (COOP) to ensure the 

ability to continue to perform essential functions under a broad range of circumstances. The 

Memorandum of Understanding (MOU) with Fiscal Service establishes protocols for making 

annuitant payments during an emergency situation when STAR is not operational. The MOU 

was enhanced and signed in FY 2021. The documentation supporting the MOU, such as 

Standard Operating Procedures and form templates, continue to be updated as needed. In 

FY 2022, an emergency payroll exercise will be conducted. This exercise will provide a 

training opportunity for the individuals involved with executing the MOU. This exercise will 

also help identify gaps in the procedures that will be used to process emergency payments. 

Lastly, this exercise will help identify missing or outdated information so that it can be 

addressed before an emergency event. 

m. Budget Formulation 

In FY 2021, the Office revised its internal budget formulation processes in developing the

FY 2022 budget request and FY 2023 - FY 2026 budget estimates to continually improve the 

accuracy and transparency of the budget formulation life cycle. The Office shifted to a 

SharePoint based model to facilitate the collaboration and consolidation of staff input, and to 

develop a more robust repository of the decisions underlying annual budget requests for 

reference in future year budget formulation. 

n. Internal Control Program 

In accordance with requirements as outlined in the OMB Circular A-123 Appendix A, 

Management of Reporting and Data Integrity Risk, the Office’s Senior Assessment Team 

(SAT) together with the help of a contractor, tested, documented, and reported on the 

Office’s internal control over financial reporting as required by the Federal Manager’s 

Financial Integrity Act of 1982 (FMFIA). The Office used the FY 2021 Treasury Guide for 

Assessing Internal Control in Accordance with OMB Circular A-123 Appendix A: 

Management of Reporting and Data Integrity Risk issued by Treasury’s ODCFO, Risk and 

Control Group to conduct the review. The scope for FY 2021 OMB Circular A-123, 

Appendix A testing covered July 1, 2020 through June 30, 2021, and management reviewed 

test results for changes in controls or other subsequent events through 
33 

September 30, 2021, to support the Office’s Final FY 2021 Assurance Statement. The 

following activities were performed: 

 Quantitative and qualitative materiality assessments were conducted to determine the 

scope of testing; 

 Internal Control Framework Assessment was performed to document and evaluate the 

design of internal controls; 

 Seven test plans were prepared and executed to confirm the design and evaluate the 

operating effectiveness of internal controls; and 

 Results of test plans were evaluated and no material weaknesses were identified. 

The results supported management’s assessment that Office’s internal controls activities are 

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

assurance for FY 2021. 

The Office contracts with a vendor with experience in internal controls to support the 

management of internal control requirements. In FY 2022, the Office will recompete the 

internal controls services contract. The contract award is planned for early FY 2022. 

In FY 2020, the Office received two Notice of Findings and Recommendations (NFRs) 

during the annual financial statement audit related to STAR system-level access approval 

procedures and the evidence of STAR audit log reviews. The Office streamlined existing 

approval process controls related to administrative access to STAR and eliminated redundant 

actions within the Office and Fiscal Service which resolved one of the NFRs. In FY 2021, 

Fiscal Service updated the reporting tool the Office used for audit log review evidence. The 

Office continues to work with the Fiscal Service ISS team, to more fully develop processes 

for documenting reviews of audit logs within the new reporting tool. In FY 2022, the second 

NFR is expected to be resolved. 

In FY 2020, the Office also received a NFR during the annual financial statement audit 

related to financial reporting disclosure requirements within Note 7, Reconciliation of Net 

Cost of Operations to Agency Outlays, Net are in accordance with the accounting standards. 

In FY 2021, the NFR was resolved as the Office implemented the corrective action to review 

control activities related to the review of new financial statement disclosures which included 

a review of updates to OMB Circular A-136, Financial Reporting Requirements, as well as 

revisiting the reconciling items and presentation prescribed by the SFFAS 53, Budget and 

Accrual Reconciliation. The Office used checklists and follow-up collaborative meetings to 

improve reviews of new financial statement disclosure requirements. 

o. Financial Statement Audit Opinion 

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

opinion on the Office’s FY 2021 Consolidated Financial Statements. KPMG noted no 

material 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 
34 

noncompliance or other matters that require reporting under Government Auditing Standards

or OMB Bulletin No. 21-04, Audit Requirements for Federal Financial Statements. 

IV. Limitation of the Financial Statements

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.
)

Independent

Auditors’  

Report

PART 2 

KPMG LLP

Suite 12000

1801 K Street, NW

Washington, DC 20006

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. 

Independent Auditors’ Report 

Deputy Inspector General, Department of the Treasury, and 

Director, Office of D.C. Pensions: 

Report on the Financial Statements 

We have audited the accompanying 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, 2021 

and 2020, and the related consolidated statements of net cost, 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. 

Management’s Responsibility for the Financial Statements 

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

in accordance with U.S. generally accepted accounting principles; this includes 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. 

Auditors’ Responsibility 

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We 

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

in accordance with the standards applicable to financial audits contained in Government Auditing Standards

issued by the Comptroller General of the United States, and in accordance with Office of Management and 

Budget (OMB) Bulletin No. 21-04, Audit Requirements for Federal Financial Statements. Those standards and 

OMB Bulletin No. 21-04 require that we plan and perform the audit to obtain reasonable assurance about 

whether the consolidated financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 

consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the 

assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud 

or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s 

preparation and fair presentation of the consolidated financial statements 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 entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the 

appropriateness of accounting policies used and the reasonableness of significant accounting estimates made 

by management, as well as evaluating the overall presentation of the consolidated financial statements. 

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

audit opinion. 

Opinion 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, 

the financial position of the Department of the Treasury’s Office of D.C. Pensions as of September 30, 2021 

and 2020, 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. 

37
Other Matters 

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 basic 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. 

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, 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 auditing standards generally accepted in the United States of America, 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

Our audits were conducted for the purpose of forming an opinion on the basic consolidated financial statements 

as a whole. The Message from the Director and the Other Information section are presented for purposes of 

additional analysis and are not a required part of the basic consolidated financial statements. Such information 

has not been subjected to the auditing procedures applied in the audits of the basic consolidated financial 

statements, and accordingly, we do not express an opinion or provide any assurance on it. 

Other Reporting Required by Government Auditing Standards 

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, 2021, 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. 

38
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 have not 

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

that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in 

Exhibit A, that we consider to be a significant deficiency. 

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, 2021 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. 21-04. 

ODCP’s Response to Finding 

The ODCP’s response to the finding identified in our audit is described in Exhibit A. The ODCP’s response was 

not subjected to the auditing procedures applied in the audit of the consolidated financial statements and, 

accordingly, we express no opinion on the response.

Purpose of the Other Reporting Required by Government Auditing Standards 

The purpose of the communication described in the Other Reporting Required by Government Auditing 

Standards section 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, DC

December 7, 2021

39
Exhibit A

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

During fiscal year 2021, one 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 application, database and operating system layers. This resulted because Fiscal Service, 

ODCP’s service provider, did not sufficiently define the criteria for documentation of the review of the 

automated audit log report, and ODCP did not sufficiently monitor the control activities of Fiscal Service. 

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 (ODCP) concurs with the above deficiency and the recommendation offered to 

ODCP management. This NFR was reissued due to the delay in implementation of a new Bureau of the Fiscal 

Service reporting/ticketing system as well as a migration to the Exadata database platform during the summer 

of 2021. The full implementation of the planned corrective actions is now scheduled for early calendar year 

2022. 

40
Financial

Statements  

and Notes

PART 3 

43 

Department of the Treasury 

Departmental Offices 

Office of D.C. Pensions 

Consolidated Balance Sheets 

As of September 30, 2021 and September 30, 2020 

(in thousands) 

2021 2020 

Assets: 

Intragovernmental 

Fund Balance with Treasury (Note 2) $ 501 $ 497 

Investments, Net 

Federal Investments (Note 3) 4,147,124 4,057,209 

Interest Receivable 20,308 20,257 

Total Intragovernmental 4,167,933 4,077,963 

 Other than Intragovernmental

 Accounts Receivable, Net (Note 4) 1,294 2,068 

Total Other than Intragovernmental 1,294 2,068

Total Assets $ 4,169,227 $ 4,080,031

Liabilities: 

Intragovernmental 

Accounts Payable $ 8 $ 53 

Other Liabilities 40 42 

Total Intragovernmental 48 95 

 Other than Intragovernmental

Accounts Payable 2,983 7,137 

Advances from Others 22,933 21,479

Other Liabilities 

Accrued Pension Benefits Payable 45,099 45,979 

Actuarial Pension Liability (Note 6) 8,010,108 8,272,445 

Accrued Payroll and Benefits 488 455 

Total Other than Intragovernmental 8,081,611 8,347,495 

Total Liabilities $ 8,081,659 $ 8,347,590

Net Position: 

Cumulative Results of Operations – Funds 

from Other than Dedicated Collections (3,912,432) (4,267,559) 

Total Net Position $ (3,912,432) $ (4,267,559) 

Total Liabilities and Net Position $ 4,169,227 $ 4,080,031

The accompanying notes are an integral part of these financial statements. 
44 

Department of the Treasury 

Departmental Offices 

Office of D.C. Pensions 

Consolidated Statements of Net Cost 

For the Years Ended September 30, 2021 and September 30, 2020

(in thousands) 

 

 

 2021 2020 

Program Costs 

Administrative Expenses (Note 5) $ 20,348 $ 23,374 

District Benefit Payments and Employer Share of 

 DC Health and Life Plans 267,375 244,803 

Pension Expense before Actuarial Assumption 

Changes (Note 6) 36,059 124,478 

Total Program Costs 323,782 392,655 

Less: Earned Revenues 

Reimbursable Income 270,387 246,531 

Interest Earned 59,395 68,702 

Employee Contributions 626 665 

Total Earned Revenues 330,408 315,898 

 

Net Program Costs Before Loss from Actuarial Assumption 

Changes (6,626) 76,757 

 

Loss on Actuarial Assumption Changes, Net (Note 6) 246,929 302,695 

Net Cost of Operations $ 240,303 $ 379,452 

 

The accompanying notes are an integral part of these financial statements. 
45 

Department of the Treasury 

Departmental Offices

Office of D.C. Pensions

Consolidated Statements of Changes in Net Position 

For the Years Ended September 30, 2021 and September 30, 2020 

(in thousands)

 

 

 2021 2020 

 

Unexpended Appropriations: 

Beginning Balance $ - $ - 

Appropriations Received 595,242 556,005 

Appropriations Used (595,242) (556,005) 

Net Change in Unexpended Appropriations - - 

Total Unexpended Appropriations – Ending Balance - - 

Cumulative Results of Operations: 

Beginning Balance $ (4,267,559) $ (4,444,295) 

Appropriations Used 595,242 556,005 

Imputed Financing 188 183 

Net Cost of Operations (240,303) (379,452) 

Change in Cumulative Results of Operations 355,127 176,736 

Cumulative Results of Operations – Ending Balance $ (3,912,432) $ (4,267,559) 

Net Position $ (3,912,432) $ (4,267,559) 

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

 

 
46 

Department of the Treasury

Departmental Offices

Office of D.C. Pensions

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2021 and September 30, 2020 

(in thousands) 

 

 2021 2020 

Budgetary Resources: 

Unobligated Balance from Prior Year Budget Authority, Net 

(Discretionary and Mandatory) (Note 8) $ 25,980 $ 19,652 

Appropriations (Discretionary and Mandatory) 1,157,617 1,128,880 

Spending Authority from Offsetting Collections 271,842 248,651 

Total Budgetary Resources $ 1,455,439 $ 1,397,183 

 

Status of Budgetary Resources: 

New Obligations and Upward Adjustments $ 1,432,506 $ 1,375,704

Unobligated Balance Exempt from Apportionment, End of Year 22,933 21,479 

Total Status of Budgetary Resources $ 1,455,439 $ 1,397,183

 

Outlays, Net: Outlays, Net (Discretionary and Mandatory) $ 1,160,535 $ 1,125,115

Distributed Offsetting Receipts (613,765) (587,895)

Agency Outlays, Net (Discretionary and Mandatory) $ 546,770 $ 537,220 

 

The accompanying notes are an integral part of these financial statements. 
47 

Department of the Treasury 

Departmental Offices 

Office of D.C. Pensions (the Office) 

Notes to Financial Statements 

September 30, 2021 and September 30, 2020 

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 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 

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

pursuant to the Act; 
48 

 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 contribution for Post-1987 

D.C. Health and Life benefits; 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 2021 and FY 2020 were $576.5 million and $540.0 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. 

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. 
49 

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 2021 and FY 2020 were $18.7 million and $16.0 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 

Financial Statement Notes 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. Federal 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 

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. 
50 

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 contribution for Post-1987 Health and Life benefits. 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. 

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. 
51 

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 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 2021 and FY 2020, 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. For FY 2021, the assumptions used to calculate the pension 

liabilities were spot rates gradually increasing from 0.80 percent to discount FY 2022 

payments, to a maximum of 3.33 percent to discount longer term payments; annual inflation 

and cost-of-living adjustments of 1.65 percent for judges, 1.68 percent for teachers, and 1.75 

percent for police officers and firefighters; and salary increases at an annual rate of 1.04 

percent for judges, 2.30 percent for teachers, 2.15 percent for police officers, and 2.20 

percent for firefighters. 

The assumptions used to calculate the pension liabilities for FY 2020 were spot rates 

gradually increasing from 0.82 percent to discount FY 2021 payments, to a maximum of 3.60 

percent to discount longer term payments; annual inflation and cost-of-living adjustments of 

1.52 percent for judges, 1.71 percent for teachers, and 1.76 percent for police officers and 

firefighters; and salary increases at an annual rate of 0.94 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.
52 

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 2021 and FY 2020, Office 

staff salaries and benefits are split 95 percent and 5 percent between the D.C. Federal 

Pension Fund and the Judicial Retirement 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 

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. 
53 

k. President’s Budget

The President’s Budget for 2023, which includes actuals for FY 2021, 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 2022. The

FY 2020 Combined Statement of Budgetary Resources (SBR) was reconciled to the Program 

and Financing (P&F) Schedules within the President’s Budget for 2022, published in 

May 2021, and there were no differences for obligations incurred, budgetary resources, status 

of budgetary resources, or net outlays. 

The President's Budget for 2022, 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, 2021, and 2020, were annual federal payments into the funds, reimbursable 

income, employee contributions, and interest earnings from investments. 

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. Intra-Governmental Costs

The Office reports intra-governmental 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 intra-governmental financing sources the 
54 

Office currently recognizes include the actual cost of future benefits for the CSRS and FERS 

retirement plans and the Federal Employees Health Benefits 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. Reclassification 

Certain amounts in the FY 2020 Financial Statements and related Notes to Financial 

Statements have been reclassified to conform with the presentation of the current year and 

the changes do not affect totals of assets, liabilities, or net position. Specifically, the 

Consolidated Balance Sheets, Consolidated Statements of Changes in Net Position, and 

related Notes to Financial Statements were reclassified to align with current year presentation 

as required by OMB Circular A-136, Financial Reporting Requirements. 

q. 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. 

r. 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. 

2) Fund Balance with Treasury

The Status of Fund balance with Treasury as of September 30, 2021 and 2020 consisted of 

the following (in thousands): 

2021 2020 

Status of Fund Balance with Treasury: 

Unobligated Balance - Available $ 501 $ 497 

Total $ 501 $ 497 
55 

3) Federal Investments

Federal Investments as of September 30, 2021 and 2020 consisted of the following (in

thousands):

2021 

Cost / 

Acquisition 

Value 

Amortized 

(Premium), 

Discount 

Federal 

Investments 

Market 

Value 

Intragovernmental Securities 

Non-Marketable Par Value $ 220,142 - 220,142 220,142 

Non-Marketable Market-based 3,950,967 (23,985) 3,926,982 3,996,416 

Total $ 4,171,109 (23,985) 4,147,124 4,216,558 

2020 

Cost / 

Acquisition 

Value 

Amortized 

(Premium), 

Discount 

Federal 

Investments 

Market 

Value 

Intragovernmental Securities 

Non-Marketable Par Value $ 219,552 - 219,552 219,552 

Non-Marketable Market-based 3,885,270 (47,613) 3,837,657 4,000,220 

Total $ 4,104,822 (47,613) 4,057,209 4,219,772

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, 2021 and 2020, as 

published in the Treasury Quote Sheets prepared by Treasury’s Office of Market Finance. 

Included in these figures are net unrealized gains of $69.4 million and $162.6 million for the 

years ended September 30, 2021 and 2020, respectively. 

The amortized cost of Federal Investments (including par value securities invested 

overnight) as of September 30, 2021 and 2020, by maturity date is as follows (in thousands): 

2021 2020 

Less than or Equal to 1 Year $ 800,558 $ 822,010

More than 1 Year and Less than 

or Equal to 5 Years 2,264,251 2,269,999 

More than 5 Years and Less than 

or Equal to 10 Years 1,073,382 960,150 

More than 10 Years 8,933 5,050 

Total $ 4,147,124 $ 4,057,209 
56 

4) Accounts Receivable, Net

The components of Accounts Receivable, Net as of September 30, 2021 and 2020, are as 

follows (in thousands):

 2021 2020 

 

Accounts Receivable, Gross $ 4,100 $ 4,930 

Allowance for Loss on Accounts Receivable (2,815) (2,868) 

Taxes Receivable 9 6 

Accounts Receivable, Net $ 1,294 $ 2,068 

The Allowance for Loss on Accounts Receivable are attributed to debts resulting from 

benefit overpayments. Accounts Receivable, Net also includes criminal restitution. For 

FY 2021 and FY 2020, the Office reported criminal debt in the gross amount of $655.8 

thousand for two cases, and $796.7 thousand for three cases, respectively. The net realizable 

value of the criminal debt reported in FY 2021 and FY 2020 was $57.8 thousand and 

$74.2 thousand, respectively. 

5) Administrative Expenses 

Administrative expenses for the years ended September 30, 2021 and 2020 are as follows (in 

thousands): 

2021 2020 

Intragovernmental Expenses 

Salaries and Related Benefits $ 980 $ 981

Contractual Services 5,166 5,544 

Rent 647 679 

 Other 3 - 

Total Intragovernmental Expenses 6,796 7,204 

 

Public Expenses 

Salaries and Related Benefits 2,998 3,158 

Contractual Services 11,145 10,443 

Other (591) 2,569 

Total Public Expenses 13,552 16,170 

 

Total Administrative Expenses $ 20,348 $ 23,374
57 

6) Pension Expense and Actuarial Pension Liability

Pension Expense and Actuarial Pension Liability for the years ended September 30, 2021, 

and 2020, includes the following components (in thousands): 

 2021 2020 

 

Beginning Liability Balance $ 8,272,445 $ 8,397,990 

Pension Expense: 

Normal Cost 6,400 5,300 

Interest on Pension Liability During the 

Period 71,418 66,357 

Actuarial (Gains) Losses During the Period: 

From Experience (41,759) 52,821 

From Discount Rate Assumption Change 337,019 382,631 

From Other Economic Assumption 

Changes (7,079) (35,887) 

From Non-Economic Assumption 

Changes (83,011) (44,049) 

Pension Expense before Other / NonActuarial Adjustments 282,988 427,173 

 

Less Amounts Paid and Accrued: (545,325) (552,718) 

 

Ending Liability Balance $ 8,010,108 $ 8,272,445 

Reconciliation to amounts reported in the Consolidated Statements of Net Cost (in 

thousands): 

 2021 2020 

Pension Expense before Actuarial Assumption Changes: 

Normal Cost $ 6,400 $ 5,300

Interest on Pension Liability During the Period 71,418 66,357 

Actuarial (Gain) Loss During the Period from Experience (41,759) 52,821 

Total Pension Expense before Actuarial Assumption Changes 36,059 124,478 

 

Loss on Actuarial Assumption Changes, Net 

Actuarial (Gains) Losses During the Period: 

From Discount Rate Assumption Change 337,019 382,631 

From Other Economic Assumption Changes (7,079) (35,887) 

From Non-Economic Assumption Changes (83,011) (44,049) 

Total Loss on Actuarial Assumption Changes, Net 246,929 302,695 

Total Pension Expense $ 282,988 $ 427,173 
58 

Federal Benefit Payments 

Federal pension benefits paid and accrued were $530.5 million and $14.8 million from the 

D.C. Federal Pension Fund and Judicial Retirement Fund, respectively, for 2021, and $538.4

million and $14.3 million, respectively, for 2020. For FY 2021 and FY 2020, approximately 

$26.5 thousand and $53.0 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 2021, 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 $337.0 million due to 

the new discount rate assumptions, which were offset by liability actuarial gains of $41.8 

million from experience, $7.1 million due to new pay and cost-of-living assumptions and 

$83.0 million due to other assumption changes which include the change in the mortality 

projection scale from MP-2019 to MP-2020. The net result was a total liability actuarial loss 

of $205.1 million for the D.C. Federal Pension Fund and Judicial Retirement Fund.

In FY 2020, the Office reported a net liability actuarial loss in the D.C. Federal Pension Fund 

and Judicial Retirement Fund. The liability actuarial losses were $382.6 million due to the 

new discount rate assumptions and $52.8 million resulting from experience, which were 

offset by liability actuarial gains of $35.9 million due to new pay and cost-of-living 

assumptions, and $44.0 million due to other assumption changes which include the change in 

the mortality projection scale from MP-2018 to MP-2019. The net result was a total liability 

actuarial loss of $355.5 million for the D.C. Federal Pension Fund and Judicial Retirement 

Fund. 

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. 
59 

For the fiscal years ended September 30, 2021 and 2020, the Reconciliation of Net Cost of 

Operations to Agency Outlays, Net consisted of the following (in thousands): 

 2021 2020 

Net Cost of Operations $ 240,303 $ 379,452 

Components of Net Cost of Operations Not Part of Outlays: 

Increase/(Decrease) in Assets Not Affecting Outlays: Accounts Receivable (774) (1,007) 

 Interest Receivable - (2,292) 

Total Increase/(Decrease) in Assets Not Affecting Outlays: (774) (3,299) 

(Increase)/Decrease in Liabilities Not Affecting Outlays: 

 Accounts Payable and Advances from Others 2,027 (4,057) 

 Other Liabilities 686 (111) 

 Other Liabilities - Actuarial Pension Liability 262,337 125,545

 Other Liabilities - Accrued Pension Benefits Payable 880 104 

Total (Increase)/Decrease in Liabilities Not Affecting Outlays: 265,930 121,481 

Other Financing Sources: 

 Imputed Financing Sources (188) (183) 

 Other 626 665 

Total Other Financing Sources: 438 482 

Other 3,387 3,632 

Total Components of Net Cost of Operations Not Part of Outlays 268,981 122,296

 Components of the Outlays That Are Not Part of Net Cost of 

Operations: 

 

 

Changes in Premiums and Amortization of Premiums/Discounts 37,427 35,472 

Changes in Interest Receivable 59 - 

Total Components of Outlays That Are Not Part of Net Cost of 

Operations 37,486 35,472 

Agency Outlays, Net $ 546,770 $ 537,220 
60 

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, 2021 and 2020, adjustments were made to the balance 

of unobligated budgetary resources available as of October 1, 2020 and 2019. These 

adjustments primarily include Recoveries of Prior Year Unpaid Obligations that were 

obligated in prior years. 

The adjustments during the years ended September 30, 2021 and 2020 are as follows (in 

thousands): 

 2021 2020 

Unobligated Balance Brought Forward, October 1 $ 21,479 $ 19,359 

Recoveries of Prior Year Unpaid Obligations 4,441 250 

Other Changes in Unobligated Balances 60 43 

Unobligated Balance from Prior Year Budget Authority, Net 

(Discretionary and Mandatory) $ 25,980 $ 19,652 

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, 2021 and 2020 

consisted of the following (in thousands): 

 2021 

Federal Non-Federal Total 

 Unpaid undelivered orders 

at the end of the year $ 283 $ 5,836 $ 6,119 

 2020 

Federal Non-Federal Total 

 

Unpaid undelivered orders 

at the end of the year $ 240 $ 5,202 $ 5,442 
Required

Supplementary

Information

(Unaudited)

PART 4 

Department of the Treasury Departmental Offices Office of D.C. Pensions

Combining Statements of Budgetary Resources By Fund (Unaudited) For the Years Ended September 30, 2021 and September 30, 2020 (In Thousands)

2021 20

D.C. Judicial

Retirement and

Survivors Annuity Fund D.C.Federal Pension Fund Conbined D .C. Pension Funds Total

D.C. Judicial

Retirement and

Survivors Annuity Fund D.C.Fede

Fu

Budgetary Resources $ 1 $ 25,979 $ 25,980 $ 32 $ 

34,059 1,123,558 1,157,617 30,716 

Unobligated Balance from Prior Year Budget Authority, Net Appropriations (Discretionary and Mandatory) Spending Authority from Offsetting Collections 271,842 271,842 

Total Budgetary Resources $ 34,060 $ 1,421,379 $ 1,455., 39 $ 30,748 $ 

Status of Budgetary Resources New Obligations and Upward Adjustments $ 34,060 $ 1,398,446 $ 1,432,506 $ 30,748 $ 

Unobligated Balance Exempt from Apportionment, end of year - 22,933 22,933 - 

Total Status of Budgetary Resources $ 34,060 $ 1,421,379 $ 1,455,439 $ 30,748 $ 

Outlays, Net: $ 34,022 $ 1,126,513 $ 1,160,535 $ 30,688 $ 

(18,738) (595,027) (613,765) (15,979) 

Outlays, Net (Discretionary and Mandatory) Distributed Offsetting Receipts Agency Outlays, Net (Discretionary and Mandatory) $ 15,284 $ 531,486 $ 546,770 $ 14,709 $ See accompanying independent auditors' report

63 
64 

(This page intentionally left blank.)
Other

Information

(Unaudited)

PART 5 

Department o f the Treasury Departmental Offices Office o f D.C. Pensions

Consolidating Balance Sheets By Fund (Unaudited) As o f September 30, 2021 and September 30, 2020 (In Thousands)

2021 2020

D.C. Judicial

Retirement and

Survivors Annuity

Fund

D.C . Federal

Pension Fund

Consolidated D.C.

Pension Funds Total

D.C. Judicial

Retirement and

Survivors Annuity

Fund

D.C . Fed

Pension F

Assets

Intragovemmental

Fund Balance with TreasuryInvestments. Net

Federal Investments

$ 104

189,704

456

$ 397

3,957,420

19,852

$ 501

4,147,124

20,308

$ 101

182, 32

464

$ 

3,8

1902, 64 3,977,669 4,167,933 182,797 3,8

Interest Receivable

Total Intragovemmental

Other than Intragovemmental

Accounts Receivable Net 3 1,291 1,294 4 

3 1,291 1,294 4 

Total Assets $ 190,267 $ 3,978,960 $ 4,169,227 $ 182,801 $ 3 8, 

Liabilities:

Intragovermental

Accounts Payable $ - $ 8 $ 8 $ 19 $ 

Other Liabilities 2 38 40 3 

Total Intragovemmental 2 46 48 22 

Other than Intragovemmental

8 2,975 2,983 5 

- 22,933 22,933 - 

Accounts Payable Advances from OthersOther Liabilities

1,213 43,886 45,099 1,200 

275,210 7,734,898 8,010,108 266,677 8,0

Accrued Pension Benefits PayableActuarial Pension Liability

Accrued Payroll and Benefits 24 464 488 22 

Total Other than Intragovemmental 276,455 7,805,156 8,081,611 267,904 8,0

Total Liabilities $ 276,457 $ 7,805,202 $ 8 0, 81,659 $ 267,926 $ 8,0

Net Position

Cumulative Results of Operations - Ending -

Funds from other than Dedicated Collections (86,190) (3,826,242) (3,912,432) (85.125) (4.1

Total Net Position (86,190) (3,826,242) (3,912,432) (85.125) (4,1

Total Liabilities and Net Position $ 190,267 $ 3,978,960 $ 4,169,227 $ 182,801 $ 3,8

See accompanying independent auditors report

67 
202

Consolidated D C

Pension Funds Total

D.C. Judicial

Retirement and

Survivors Annuity Fund

D.C. Fe

Pension 

$ 20,348 $ 508 $ 

267,375 - 

36,059 17,636 

323,782 18,144 270,387 - 

59,395 3,632 

626 665 - 

330,408 4,297 

(6,626) 13,847 

246,929 9,022 

$ 240,303 

$ 22,869 

$ 

Department o f the Treasury Departmental Offices Office o f D.C. Pensions

Consolidating Statements o f Net Cost By Fund (Unaudited) For the Years Ended September 30, 2021 and September 30, 2020 (In Thousands)

See accompanying independent auditors' report

D.C. Judicial 2021

Retirement and D.C.Federal 

Program Costs

Survivors Annuity Fund Pension Fund

Administrative Expenses Distnct Benefit Payments and Employer Share or $ 459 $ 19,889 DC Health and Life Plans - 267,375 Pension Expense Before Actuarial Assumption Changes 15,477 20,582 Total Program Costs 15,936 307,846

Less Earned Revenues

- 270,387

3,367 56,008

Reimbursable IncomeInterest EarnedEmployee Contributions 626 - Total Earned Revenues 4,013 326,395

Net Program Costs Before Loss from Actuarial Assumption Changes 11,923 (18,549)Loss on Actuarial Assumption Changes, Net 7,690 239,039 Net Cost of Operations $ 19,613 $ 220,490
Department o f the Treasury Departmental Offices Office o f D.C. Pensions

Consolidating Statements o f Changes in Net Position By Fund (Unaudited) For the Years Ended September 30, 2021 and September 30, 2020 (In Thousands)Unexpended Appropriations

Beginning Balance

Appropriations ReceivedAppropriations Used

Net Change in Unexpended Appropriations

Total Unexpended Appropriations - Ending Balance

Cumulative Results of Operations

Beginning Balance

Appropriations Used

Imputed Financing

Net Cost of Operations

Change in Cumulative Results of Operations

Cumulative Results of Operations - Ending Balance

Net Position

See accompanying independent auditors' report

2021

D .C. Judicial

Retirement and 

Survivors Annuity

Fund

D.C . Federal 

Pension Fund 

Consolidated D.C.

Pension Funds Total

$ - $ - $ - 18,738 576,504 595,242

(18,738) (576,504) (595,242) -- -- --$ (85,124)

18,738

10

(19,813)

$ (4,182,435)

576,504

178

(220,490)

$ (4,267,559)

595,242

188

(240,303)

(1,065) 356,192 355,127

$ (86,189) $ (3,826,243) $ (3,912,432)

$ (86 189) , $ (3,826,243) $ (3,912,432)

2020

D.C. Judicial

Retirement and

Survivors Annuity

Fund

D.C. Fed

Pension 

$ - $ 

15,979 

(15,979) (

- -- 

- $ (78,243)

15,979

9

(22,869)

$ (4,

(

(6,881) 

$ (85,124) $ (4,

$ (85,124) $ (4,

69 
Department o f the Treasury Departmental Offices Office of D.C. Pensions

Schedule of Pension Expense - by Fund (Unaudited) For the Years Ended September 30, 2021 and September 30, 2020 (In Thousands)

Beginning Liability BalancePension Expense

Normal CostInterest on Pension Liability During the Period

Aduanal (Gams) Losses During the Period

From Experience

From Discount Rate Assumption ChangeFrom Other Economic Assumption Changes

From Non-Economic Assumption Changes

Pension Expense before Other/ Non-Aduana! Adjustments

Less Amounts Paid and Accrued

Ending Liability Balance

D.C. Judicial

Retirement and

Survivors Annuity

Fund

$ 266,677

6,400

7,586

1,491

7,560

3 ,741

(3,412)

23,366

(14,833)

$ 275,210

2021

D.C. Federal

Pension Fund

$ 8,005,768

63,832

(43,250)

329,459

(10,820)(79,599)

259,622

(530,492)

$ 7,734,898

Consolidated D.C.

Pension Funds Total

$ 8,272,445

6,400

71,418

(41,759)

337,019

(7,079)

(83,011)

282,988

(545,325)

$ 8,010,108

D.C. Judicial 

Retirement and 

Survivors Annuity

Fund

$ 254,283

5,300

7,755

4,5815,978

4,505

(1,461)

26,658

(14,264)

$ 266,677

202

D.C . Fed

Pension 

$ 8

(

$ 8

See accompanying independent auditors' report

70 
Executive Sum m ary

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 refere 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:

• To illustrate the current assets and liabilities of each Plan as of the end of Fiscal Year (FY) 2021

(October 1, 2020 through September 30, 2021);

• To review the experience of the Program over the past year and to discuss reasons for changes in

Program costs;

• To determine the appropriate contribution to be paid by the Department of the Treasury to the Funds in

FY 2022 (October 1, 2021 through September 30, 2022); and

• 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.

Summary of Results

As of October 1, 2021

Police Officers and

Firefighters', and 

Teachers' Plans

Judges' Plan

$ 7,778,784,800 

(3,952,499,961)

$ 276,422,364

(190,105,319)

Actuarial Accrued Liability 

Plan Assets

Unfunded Actuarial Accrued Liability $ 3,826,284,839 $ 86,317,045

Normal Cost with Interest (including expected 

employee contributions) N/A $ 6,200,000

71 

Actuarial Valuation Report FY 2021 (unaudited) 
Executive Sum m ary

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 $ (487,082) $ (1,040,427)

(33,867,078) 3,137,968

(3,210,340) 60,902

N/A

Inactive Mortality

Salary Increase

New Entrants

Cost-of-Living Adjustment (COLA)

Different than Expected

(29,740,798) (535,717)

22,465,508 27,377

1,946,540 N/A

487,534 -

(Gains)/Losses due to Census Changes:

(Gains)/Losses due to New Terminated Vested

Plan Members:

(Gains) / Losses due to New Actives Due to

Ongoing Data Management:

Total $ (4 2 ,4 0 5 ,7 1 6 ) $ 1,650,103

We have provided clarification on these items below:

• (G a in s)/ L o sse s d u e to Plan Exp erien ce: 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:

• A ctive D ecrem en ts: 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 fewer retirements than expected for the

Teachers. For the Judges' Plan, fewer active members retired than were expected, resulting in a gain.

72 
• Inactive Mortality: The actuarial valuation assum es that each inactive plan m em ber 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 m embers in pay status dying at an

earlier age and in greater num ber than expected in the past year. For the Judges' Plan there were four

deaths since the prior year, which was less than expected, resulting in a loss. Sm aller populations are

expected to experience larger deviations from expected year-over-year than a larger population, as

individual deaths or survivorship have a more significant relative im pact on the liability than in a larger

population. Long-term gains and losses are expected to offset each other with experience aligning

to the assumed m ortality probabilities.

• Salary Increase: The actuarial valuation assum es 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 am ount reported in the current valuation. A gain is reported when

a plan m em ber's actual salary is lower than the expected amount, and a loss is reported when a

plan m em ber’s actual salary is higher than the expected amount. The gain for the Police Officers

and Firefighters' and Teachers' Plans is due in part to the fact that there was no collectively bargained

pay increase.

• 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 one new entrant but the individual did not

join with past service, therefore there is no (gain) or loss.

• CO LA Different Than Expected: The actuarial valuation assum es that retirement

benefits for inactive plan m embers that are receiving benefits will increase by a certain amount.

An individual (gain) or loss is generated for each plan m em ber based on their actual benefit

am ount reported in the current valuation. The Police Officers and Firefighters' and Teachers' Plans

had a gain due to lower actual COLA percentages than expected. The Judges' Plan had a

gain due to lower COLA than expected.

Executive Summary

Highlights of the Actuarial Valuation

• (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 tim e. This category of (gain)/loss is described in more detail below.

For the Police Officers and Firefighters' and Teachers' Plans, the net loss am ount was $22.5 million and 

includes the following:

• A $20.1 million loss resulting from new beneficiaries following the death of plan members for

whom the chosen form of paym ent was unknown.

• A $4.2 million gain resulting from active plan members who retired or term inated within the past

year, prim arily due to benefits calculated at retirem ent different than previously estimated or those 

who were not eligible to begin benefits in the prior valuation.

• A $3.9 million net loss resulting from ongoing data managem ent, including unexpected changes

to data fields such as hire date, salary, service, etc.

• A $2.5 million loss resulting from data updates for continuing inactive plan members, prim arily due

to recalculation of benefit am ounts in the census data.

• A $0.2 million loss resulting from rehires.

73 
Executive Summary

H ighlights of the Actuarial Valuation

For the Judges' Plan, the total loss am ount of $27,000 includes the following:

• A $127,000 net gain resulting from active plan m em bers who retired or term inated

within the past year, prim arily due to benefits calculated at retirem ent different than previously 

estim ated.

• A $78,000 net loss resulting from ongoing data m anagem ent, including unexpected changes

to data fields such as hire date, salary, service, etc.

• A $40,000 loss resulting from data updates for continuing inactive plan m em bers, prim arily due

to recalculation of benefit am ounts in the census data.

• A $36,000 loss resulting from new beneficiaries following the death of plan m em bers.

• (G ains)/Losses due to New Term inated Vested Plan Members: There were 39 new term inated vested

plan m em bers discovered as a result of a data clean-up initiative perform ed by the program . This caused a 

$1.9 m illion loss to the Police Officers and Firefighters' and Teachers' Plans.

• (G ains)/Losses due to New Actives as a Result of Ongoing Data M anagement: There were 5 new

active plan m em bers discovered as a result of a data clean-up initiative perform ed by the program . This 

caused a $488,000 loss to the Police Officers and Firefighters' and Teachers' Plans.

74 
Asset (Gain)/Loss D.C. Federal Pension 

Fund Judicial Retirement Fund

$ 3,870,858,529 $ 182,824,303

29,480,387 5,104,936

55,402,676 3,335,806

Beginning of Year Assets

Expected Return on Assets

Actual Return on Assets

Asset (Gain)/Loss $ (25,922,289) $ 1,769,130

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 2.91% 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,

0.82%. The Judicial Retirement Fund experienced a lower-than-anticipated return of 1.81% on fund assets

and the D.C. Federal Pension Fund experienced a higher-than-anticipated return of 1.43% 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.

Executive Summary

H ighlights of the Actuarial Valuation

Source of Asset (Gain)/Loss due to Actuarial Experience

The plan assets experienced the following rates of return during the prior plan year:

D.C. Federal Pension 

Fund Judicial Retirement Fund

Assets 1.43% 1.81%

75 
S o u rce o f L ia b ility (G a in )/L o s s due to C han ges in A ctu a ria l A ssu m p tio n s fron t the

P re v io u s V a lu a tio n

Executive Sum m ary

H ighlights of the Actuarial Valuation

Assum ption Change

Police O fficers and

Firefighters ', and

Teachers' Plans

Judges' Plan

Discount Rate Assumption $ 329,458,900 $ 7,560,413

Other Economic Assumptions (10,819,840) 3,741,122

Non-Economic Assumptions (79,599,639) (3,411,890)

Total $ 239,039,371 $ 7,889,645

The discount rate assumption was updated according to prescribed bed guidance. The Effective Interest Rate

(EIR) for all plans decreased, causing a loss.

For the Police Officers and Firefighters' and Teachers' Plans, the cost-of-living adjustment (COLA) for

annuitants was the only other economic assumption change; the review of the wage inflation assumption

resulted in no change to the assumption for these plans. For Judges' Plan, the other economic assumption

changes were the COLA for annuitants and the salary increase assumption for active plan members. A

detailed description of the changes since prior year is available in Appendix A: Actuarial Assumptions and

Methods.

For the Police Officers and Firefighters', and Teachers' Plans, and the Judges' Plan, the updated mortality

projection scale to MP2020 was the only impact for non-economic assumptions. A complete description of the

actuarial assumptions and rationale can be found in Appendix A: Actuarial Assumptions and Methods and

Appendix B: Rationale.

76 
Government Contributions

Executive Sum m ary

Highlights of the Actuarial Valuation

This report includes a calculation of the Government Contribution required to be made before the end of

FY 2022 (excluding the reimbursement for expenses). The table below contains Government Contribution

(excluding expenses) for FY 2021 and FY 2022.

Contribution Year

Government Contribution 

(excluding expenses)

D.C. Federal Pension Fund Judiciary Retirement Fund

September 30, 2021 $ 558,700,000 $ 18,300,000

September 30, 2022 $ 520,900,000 $

The increase/(decrease) in the Government Contribution amounts from FY202

table below.

18,300,000

1 to FY2022 is explained in the

Police Officers and

Firefighters', and 

Teachers' Plans

Judges' Plan

Full amortization of the 10/1/2001 Assumption

change gain/loss $ (40,100,000) $ (500,000)

Full amortization of the 10/1/2001 Plan

Change gain/loss $ (16,000,000) N/A

Full amortization of the 10/1/2011 Experience

gain/loss

New amortization base for the 10/1/2021

Experience gain/loss

New amortization base for the 10/1/2021

Assumption change gain/loss

Normal Cost change

Employee Contribution change

$ 16,200,000

(7,500,000)

9,600-,000

-

$ (100,000)

400,000

400,000

- (200,000)

Total $ (37,800,000) $ -

77 
Executive Summary 

Actuarial Valuation Opinion 

This repo1t presents the results of the actuarial valuation of the P

rogram as of October 1, 2021. 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 Depa1tment of the Treasury as of May 1, 2021 (plan data was projected to September 30, 2021 by 

adjusting for expected mortality for inactive plan members) and the estimated asset information projected 

by the Department of the Treasury to September 30, 2021 (provided on August 4, 2021). 

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 aOOJrate, and know of no fu,ther 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 demooraphic 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 pe1formed. 

The undersigned with actuarial credentials collectively meet the Qualification Standards of the Ame,·ic::an

Academy of Actuaries to render the actuarial opinions contained herein.

This repo1t was prepared solely for the benefit and internal use of the Depa1tment 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 Depa1tment 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 repo1t. 

DELOITTE CONSUL TING LLP 

Jeffrey Rees, FSA, MAAA, FCA 

Enrolled Actuary No. 20-05941 

October 21, 2021 

78 

Michael de Leon, ASA, MAAA, FCA 

Enrolled Actuary No. 20-06450 

October 21, 2021 

/s/ /s/
E x ecu tive S u m m a ry

Summary of Results

Police Officers and Firefighters', and Teachers' Plans

1 Throughout 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.

Va lua tio n Date

October 1, 2021 October 1, 2020

Plan Mem ber Counts

803 1,024

269 244

13,187 13,345

Actives

Terminated Vested

Annuitants

Total 14,259 14,613

Contributions

Federal Required Contribution $ 520,900,000 $ 558,700,000

$ 261,499,178 $ 358,866,503

- -

838,561 1,168,243

341,683 494,825

Present Value of Benefits (PVB) 

Active Plan Mem bers

Retirement Decrement

Termination Decrement

Disability Decrement

Death Decrement

Total $ 262,679,422 $ 360,529,571

$ 6,053,132,279 $ 6,195,482,251

37,234,971 37,732,770

646,661,754 690,435,989

779,076,374 766,366,380

Inactive Plan Mem bers

Normal Retirees1

Terminated Vested

Disabled Retirees'*

Beneficiaries

Total $ 7,516,105,378 $ 7,690,017,390

Total PVB (inactive and active) $ 7,778,784,800 $ 8,050,546,961

Unfunded Actuarial Accrued Liab ility (AAL)

Active AAL $ 262,679,422 $ 360,529,571

Inactive AAL 7,516,105,378 7,690,017,390

Total AAL $ $

Asset Value as of Valuation Date $

7,778,784,800

(3,952,499,961) $

8,050,546,961

(3,870,858,529)

Unfunded AAL $ 3,826,284,839 $ 4,179,688,43 2

79 
E x e cu tiv e S u m m a ry

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.

V a lu a tio n Date

October 1, 2021 October 1, 2020

Plan Member Counts

57 61

- -

103 101

Actives

Terminated Vested

Annuitants

Total 160 162

Contributions

Government Contribution (excluding expenses) $ 18,300,000 $ 18,300,000

$ 137,957,809 $ 136,533,697

- -

- -

733,431

Present Value of Benefits (PVB)

Active Plan Members

Retirement Decrement

Termination Decrement

Disability Decrement

Death Decrement

Total $

727,995

138,685,804 $ 137,267,128

$ 181,812,743 $ 173,986,119

- -

2,099,448 2,052,526

9,566,351

Inactive Plan Members

Normal Retirees1

Terminated Vested

Disabled Retirees1

Beneficiaries

Total $ 185,604,996

Total PVB (inactive and active) $

9,866,579

193,778,770 $

332,464,574 $ 322,872,124

Unfunded Actuarial Accrued Liability (AAL)

Active AAL $ 82,643,594 $ 82,271,955

Inactive AAL 193,778,770 185,604,996

Total AAL $ 267,876,951

Asset Value as of Valuation Date $

276,422,364 $

(190,105,319) $ (182,824,303)

Unfunded AAL $ 86,317,045 $ 85,052,648

$ 6,200,000 $ 6,400,000

(600,000)

Total Normal Cost

Employee Contributions

Net Employer Normal Cost $

(600,000)

5,600,000 $ 5,800,000

80