United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Retirement and Insurance Service 

Benefits Administration Letter 

Number: 01-306 Date: January 10, 2001 

Subject: Estimates of Imputed Costs 

As announced in our Financial Management Letter (FML) F-00-07, we have attached to this letter our 

estimate of your imputed costs for the Federal civilian benefit programs -- Pensions, Health Benefits and 

Life Insurance. It is important that you recognize that these are estimates only, based on the information 

we have available to us. As such, you should NOT use these numbers to post to your internal accounts. 

Rather, these estimates of your imputed costs should be used solely as a baseline against which to gauge 

the reasonableness of your own calculation. 

Basis of our Calculation of Imputed Costs 

Although we think our estimates of your imputed costs for Pensions, Health Benefits and Life Insurance 

are “in the ballpark,” we do not have the data needed to compute them with a high degree of precision. 

For instance, we have no knowledge of your employees’ basic pay, which is a critical element in your 

calculation of the imputed cost for Pensions and Life Insurance Programs. 

The following is presented so that you may have a basic understanding of the methodology we 

have used to estimate your imputed costs: 

Pension: We first derived an estimate of annual basic pay subject to CSRS and FERS 

deductions by dividing our fiscal year 2000 balance in account 5400G.24 – Benefit Program 

Revenue – for CSRS and FERS by the agency contribution rate in effect for each in fiscal year 

2000. We then multiplied the quotient by 8.29 percent for CSRS and a negative 0.4 percent for 

FERS. The 8.29 percent for CSRS is the cost factor for “regular” CSRS employees [24.2 

percent] less total contributions [15.91 percent]. The negative 0.4 percent for FERS is the cost 

factor for “regular” FERS employees [11.5 percent] less total contributions [11.9 percent]. 

Life Insurance: We assumed that 90 percent of all eligible employees are covered by the Life 

Insurance Program. Thus, we derived the annual basic pay subject to Life Insurance deductions 

by multiplying the annual basic pay subject to CSRS and FERS by 0.9. We then multiplied the 

product by the Life Insurance cost factor of 0.2 percent. 

Health Benefits: We followed the instructions we provided to you in FML F-00-07, using your 

September 1999, March 2000 and September 2000 Headcount submissions and applied the 

2000 Health Benefits cost factor of $2,733. 

_________________________________________________________________________________ 

Civil Service Federal Employees Federal Employees Federal Employees 

Retirement Group Life Health Benefits Retirement

System Insurance Program System
Coordination with Reconciliation of Intragovernmental Account Balances 

In FML F-00-09, we provided you with our fiscal year 2000 balance in account 5400G.24 to which you are 

now reconciling the balance in your reciprocal expense account 6400G.24 – Benefits Expense. As 

discussed above, our calculation of your imputed cost for Pensions and Life Insurance applies the same 

5400G.24 account balance as we provided you in FML F-00-09. As a consequence, where our mutual 

intragovernmental account balance reconciliation effort results in a need for a material adjustment to our 

5400G.24 balance, we will also adjust our estimate of your imputed cost for Pensions and Life Insurance. 

New FACTS Disclosure Requirement 

We want to remind you again of the new Federal Agencies’ Centralized Trial-Balance System (FACTS) 

disclosure requirement for 2000 relating to imputed costs. Treasury requires that you disclose in Note 

14 -- Federal Employee and Veteran Benefits Payable -- your imputed cost relating to Pensions, Health 

Benefits and Life Insurance. If there is a significant difference between what you report as imputed 

costs in Note 14 and the imputed costs we have provided to you on the attachment to this letter, 

Treasury staff may contact you about it. 

Accounting Entries 

Again, as a reminder, your imputed costs for the Federal civilian benefit programs is recorded as a charge 

to standard general ledger (SGL) account 6730G. An “imputed financing source” must also be recognized 

in an amount equal to the imputed cost, as a credit to SGL account 5780G. 

 DR. 6730G.24 Imputed Cost 

 CR. 5780G.24 Imputed Financing Sources 

Please note the “24” in the above entry. It is our two-digit department code, as we are your “trading 

partner” for reporting your imputed costs for the Federal civilian benefit programs via FACTS. It is 

essential that you use partner code “24”, NOT “00”, as was required for 1999. 

If you have any questions about this letter, we would prefer that you email us at finance@opm.gov, so 

that we may have a record of them. You may also phone us on 

(202) 606-0606. 

 

 Robert A. Yuran, Chief 

 Financial Policy Staff 

Attachment