100%-Unfunded U.S. Gov Pension Liability = $10.4 TRillion

[Pat]

.
It strikes me that U.S. governmental pensions, both military and civilian, are 100% unfunded!!!

Which, when it occurs to you, is ridiculous when contrasted with the current political battles over whether Social Security is properly funded!!!

[In other words, the failure to provide any funding at all for all of the U.S. government's military and civilian pension liabilities is bound to dwarf by far any underfunding problem with respect to Social Security!!!]

Accordingly, I propose that this issue be added to the Suggested Discussion Outline under "H. Possible Six-Degrees-Of-Separation E-mail Campaigns."

[Pat]

.
President Obama’s FY-2014 Federal Budget (like recent Federal Budgets) does not show how much federal pensions cost!!!

Instead, “outlays” are broken down into “discretionary” and “mandatory” amounts.

“Discretionary amounts” are broken down by department, with justifications for major categories. But none of the major categories within each department’s “discretionary amount” seems (from the line-item descriptions) to include pension costs.

“Mandatory amounts” are broken into only four categories = (1) Social Security, (2) Medicare, (3) Medicaid, and (4) “Other Mandatory Programs.”

It would appear that Federal Pension Costs must be buried in “Other Mandatory Programs,” the amount of which rises from $559 Billion in FY 2014 to $809 Billion in FY 2023.

**********
For a “quick check” of whether Total Federal Pension Costs could be 100% of those amounts, we start with the US Office of Personnel Management reports that at 12/31/2011 (the latest data available), the Federal Government employed 2,820,000 civilian personnel and 1,583,000 active-duty military personnel.

The only data that seems to be readily available about any federal retirees is that in 2008 there were 1,983,467 retired military personnel (“Retired Military Personnel,” Patrick Air Force Base, Florida: The Intercom (a publication of the Military Officers Association of Cape Canaveral), June 2009, p. 4).

According to the U.S. Center for Disease Control (CDC), U.S. Life Expectancy at Birth is 78.5 years and at age 65 is 19.2 years (that is, the average 65-year-old will live 19.2 more years to 84.2 years of age).

If it is assumed that the average military person retires at age 44, then the average military retiree is due a pension for an average of 40 years (84 years – 44 years).

So if the ratio of military retirees (1,983,467) to active-duty military personnel (1,583,000) is 125.3% for an average retirement of 40 years, then for an average ratio for civilian retirement of 19 years would be 59.4% of the number of active civilian employees (2,820,000) = 1,675,080.

So our guess of total federal retirees = 1,983,467 military + 1,675,080 civilian = 3,658,547.

And if their pensions were 100% of the FY-2014 Federal Budget’s “Other Mandatory Programs” amount of $559 Billion, the average pension would be $152,793/person/year.

Although that might seem a tad high, nonetheless it would be fair because the Federal Budget is SO NON-TRANSPARENT (!!!) to assume that 100% of the Federal Budget’s “Other Mandatory Programs” comprise Federal Pensions until the government “comes clean” in terms of transparency.

**********
If we take the FY-2014 Federal Budget’s “Other Mandatory Program” Amounts 2014-2023 and then assume that the last amount (for 2023) remains constant into the future, and if we assume that 64.05% of those amounts are civilian pensions that will last 19 years and 25.95% of those amounts are military pensions that will last 40 years, and then discount those respective amounts for each year by 4%/year (the rate for discounting pension liabilities using the Fair Value Method required by the U.S. Securities and Exchange Commission for corporations -- as suggested by the non-partisan Congressional Budget Office in its most recent study of Under-Funded State & Local Pension Funds -- please see the Q&A’s for further details), the cumulative total UNFUNDED FEDERAL PENSION LIABILITY = $10.4 TRillion!!!