	Objectives, Scope, and Methodology

Our objectives were to determine whether participating judges’  contributions for the 3 plan years ending on September 30, 2007, funded at  least 50 percent of the JSAS costs and, if not, what adjustments in the  contribution rates would be needed to achieve the 50 percent ratio. History of JSAS

JSAS was created in 1956 to help provide financial security for the families  of deceased federal judges. It provides benefits to surviving eligible  spouses and dependent children of judges who participate in the plan. Judges may elect coverage within 6 months of taking office, 6 months after  getting married, if they were not married when they took office, 6 months  after being elevated to a higher court, or during an open season authorized  by statute. Active and senior judges currently contribute 2.2 percent of  their salaries to JSAS, and retired judges contribute 3.5 percent of their  retirement salaries to JSAS. The  annuity may not exceed 50 percent of the high-3 and is guaranteed to be  no less than 25 percent. In response to concerns that required contributions of 5 percent may have  created a disincentive to participate, Congress enacted the Federal Courts  Administration Act of 1992. The increase in the federal government’s contribution rates was a  result of the increase in normal costs resulting from several combined  factors, such as changes in actuarial assumptions; lower-than-expected  investment experience on plan assets; demographic changes—retirement,  death, disability, new members, pay increases; as well as an increase in  plan benefit obligations. The judges’ average contribution share for the 9-year  period was approximately 60 percent. For the 3-years covered by this review, we determined and  reported that judges’ contributions represented approximately 54 percent  of the normal costs of JSAS, and therefore, an adjustment to the judges’  contribution rates was not needed under the existing legislation because  the judges’ contribution achieved 50 percent of JSAS costs. This percentage  is the JSAS’s normal cost rate.
Why GAO Did This Study

The Judicial Survivors' Annuities System (JSAS) was created in 1956 to provide financial security for the families of deceased federal judges. It provides benefits to eligible spouses and dependent children of judges who elect coverage within 6 months of taking office, 6 months after getting married, 6 months after being elevated to a higher court, or during an open season authorized by statute. Active and senior judges currently contribute 2.2 percent of their salaries to JSAS, and retired judges contribute 3.5 percent of their retirement salaries to JSAS. Pursuant to the Federal Courts Administration Act of 1992 (Pub. L. No. 102-572), GAO is required to review JSAS costs every 3 years and determine whether the judges' contributions fund at least 50 percent of the plan's costs during the 3-year period. If the contributions fund less than 50 percent of these costs, GAO is to determine what adjustments to the contribution rates would be needed to achieve the 50 percent ratio.

What GAO Found

For the 2005 to 2007 time frame covered by this review, the participating judges funded approximately 54 percent of JSAS costs, and the federal government funded 46 percent. The increase in the government's contribution rate over the 3-year period was a result of increases in costs. The increase in costs reflected the combined effects of changes in actuarial assumptions; lower-than-expected rates of return on plan assets; demographic changes such as retirement, death, disability, new members, and pay increases; as well as an increase in plan benefit obligations. GAO determined that an adjustment to the judges' contribution rate was not needed because their average contribution share for the 3-year period exceeded the 50 percent minimum contribution goal specified by law. GAO examined the annual share of normal costs covered by judges' contributions over a 9-year period and found that, on average, the participating judges funded approximately 60 percent of JSAS's costs.