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2015 Report on Form 10-K United States Postal Service 25
Net Periodic Costs
The following information, provided by OPM, details the net periodic costs for CSRS and FERS:
(in billions) Projected* Actual
2015 2014
CSRS
Actuarial liability as of October 1 $ 201.5 $ 204.4
+ Contributions** 0.2 0.2
- Benefit disbursements (12.3)(12.1)
+ Interest expense 10.2 10.4
+ Total actuarial loss — (1.4)
Actuarial liability as of September 30 $ 199.6 $ 201.5
FERS
Actuarial liability as of October 1 $ 104.5 $ 96.6
+ Normal cost 3.6 3.5
- Benefit disbursements (2.3)(2.1)
+ Interest expense 5.5 5.2
+ Total actuarial gain — 1.3
Actuarial liability as of September 30 $ 111.3 $ 104.5
Total actuarial liability as of September 30 $ 310.9 $ 306.0
*9/30/2014 is the latest actual data available.
**Contributions for CSRS consist of employee contributions only.
Cost Methods and Assumptions
The Board of Actuaries recommended revisions to certain demographic assumptions including additional future mortality
improvement, effective for the September 30, 2013, valuation. The following table details the long-term economic assumptions
recommended by the Board of Actuaries in July 2012 and revised in June 2013:
2015 2014
CSRS FERS CSRS FERS
Rate of Inflation 3.00% 3.00% 3.00% 3.00%
Long-term COLA 3.00% 2.40% 3.00% 2.40%
Actual COLA applied 1.70% 1.70% 1.50% 1.50%
Long-term salary increase 3.25% 3.25% 3.25% 3.25%
Actual salary increase 1.00% 1.00% 1.00% 1.00%
Long-term interest rate 5.25% 5.25% 5.25% 5.25%
Employee Health Benefits Expense
Health benefits expense is most significantly impacted by the number of employees electing coverage and the premium costs
of the selected plans. Our active employees may participate in FEHB, which is administered by OPM. We account for employee
benefit costs as an expense in the period in which our contributions to the plans under the program are due.
Employee health benefits expense was $4.8 billion for the year ended September 30, 2015, essentially unchanged from the
2014 expense. In 2014, employee health benefits expense declined $147 million from 2013, the result of lower career
complement levels throughout much of the year.