$1,017 million, leaving a balance of $33 million for contingency reserves. The income of the fund is derived from premium receipts, interest on investments, and payments which are made to the fund from the appropriation Veterans insurance and indemnities for claims (a) resulting from the extra hazards of the veteran's service, and (b) arising on certain policies held by personnel on active military duty. Administrative expenses are charged to the appropriation General operating expenses. The fund is operated on a commercial basis to the greatest possible extent consistent with law. In the program and financing statement, the noncash transactions, which are offset by other claims of the fund, are excluded from program costs in order to show the obligations. The following business-type statements of revenue and expense and of financial condition include these noncash transactions relating to the status of insurance policy accounts. Revenue, Expense, and Retained Earnings (in thousands of dollars) Program and Financing (in thousands of dollars) Identification code 29-00-6000-0-9-000 67,186 170 65,213 173 68,429 71,349 67.356 71,059 65,386 69,570 -4,184 90 35,544 32,624 28,921 32,624 28,921 24,737 Relation of obligations to expenditures: 72 Obligated balance, start of year.. 74 Obligated balance, end of year.... 65,520 64,107 62,694 -64,107-62,694-61,281 OTHER INDEPENDENT AGENCIES AMERICAN BATTLE MONUMENTS COMMISSION CONTRIBUTIONS Program and Financing (in thousands of dollars) Policy liens.. 1. Purchase of flowers... justified. An estimated $16 million will be paid in 1967 from the contingency reserve to qualified carriers. In addition, an amount equal to 1% of all contributions is set aside for administrative expenses incurred by the Commission in the administration of the act. Public Law 88-284, enacted March 17, 1964, provides that the Commission from time to time and in such amounts as it considers appropriate may transfer unused funds for administrative expenses to the contingency reserve of the plans under contract. In 1965, $3.1 million was transferred from the administrative expense reserve to the contingency reserve. During 1966 another $3.8 million will be available for transfer, and in 1967 slightly more than $4.3 million will become available. On June 30, 1965, there were total reserves of $64.1 million held by the fund. Of this amount, $2.4 million was being held for payment of administrative expenses and $61.7 million was held as a contingency reserve for payment to qualified carriers. Financing. The fund will be financed by contributions. from participants and the Government. Operating results.-Earnings will be retained to meet the cost of administration and future benefits. Revenue, Expense, and Retained Earnings (in thousands of dollars) 460,121 -9,661 9,202 -7.686 6,853 -7,647 -9,278 8,525 -8,480 Revenue.. Net income for the year.. Retained earnings, end of year.. 455,289 Applicable receipts.. 527,460 567,392 -464,567-518,935-575,872 1 Balances of selected resources are identified on the statement of financial condition. This fund finances the payment of subscription charges to approved carriers of the cost of health benefits protection as provided by the Federal Employees Health Benefits Act of 1959, as amended (5 U.S.C. 3001-3014), together with expenses incurred by the Civil Service Commission in administration of the act. Assets: Financial Condition (in thousands of dollars) Treasury balance. Total assets.. Liabilities: Current Deferred income (Government contribu- Total liabilities.... Budget program.-Almost 2 million employees and approximately 206,300 annuitants are participating in this program. By the end of 1967 it is estimated that an additional 102,000 annuitants will participate in the program. For 1967 an estimated $417.3 million will be deposited into the fund from amounts withheld from employees and annuitants and $160.2 million will be contributed by the Government. An estimated $555.3 million will be paid from the fund in 1967 to approved health benefit plans. An amount equal to 3% of the contribution toward each plan is set aside in the fund to provide a contingency reserve for that plan. The contingency reserve is used to defray future increased rates, to reduce contributions, or to provide increased benefits. Payments are made to experience rated carriers from the contingency reserve when the reserves held by Unpaid undelivered orders 1 the carrier are less than a stipulated amount and the plan's contingency reserve held by the fund exceeds 1 month's subscription charges. Community rated carriers may also receive additional payments from their plan's contingency reserve held by the fund, when properly Trust equity: 25.1 Other services.. 459,118 531,082 571,304 This fund finances the payment of group life insurance. premiums to private insurance companies under the Federal Employees' Group Life Insurance Act of 1954 (5 U.S.C. 2091-2103) and any expenses incurred by the Civil Service Commission in administration of this act as annually authorized by Congress. Budget program. Through June 30, 1965, with respect to the basic insurance program, a total of $914.1 million was withheld from the salaries of covered employees and $457 million was contributed by the Government to the fund. It is estimated that in 1967, $118.4 million will be paid into the fund by employees and $59.2 million by the Government. As of June 30, 1965, a total of $916 million had been paid by the insurer in benefits. It is estimated that over $155 million in benefits will be paid in 1967. Most of the difference between receipts and benefit payments under the policy is placed in reserves. June 30, 1965, the end of the last completed policy year, there were total reserves of $496.3 million of which $133.1 million was held as a special contingency reserve by the insurer at interest, and $363.2 million was held by the fund with the Treasury of the United States. The contingency reserve is limited to a level of $150 million, and all amounts above this figure periodically are returned and deposited in the Treasury of the United States to be invested. On A summary statement of the operations of the contingency reserve for the three most recent policy years, 1963 through 1965, and the total at the end of the 11th 147,320 policy year follows: STATEMENT OF ANNUAL ACCOUNTING AND CONTINGENCY [By policy year. Agency contributions.. -54,463 -57,200 -59,200 Interest revenue.. -14,712 -15,300 -16,800 July 1, 14 Non-Federal sources: 1962 July 1, 1963 11th year. July 1. -3,052 -22 -2,900 -2,800 -20 -15 1964June 30, 1965 161,216 Totals, end of 11th policy year 1,352,859 2. Interest added to contingency reserve -10,073 -15,376 -352,910-376,893 -394,000 376,893 15,376 15.271 394,000 444,000 (b) Accidental death and dismemberment insurance. (c) Conversion charges..... Through June 30, 1965, individuals whose beneficial life insurance agreements have been assumed by the fund paid $25.9 million into the fund. It is estimated that in 1967 about $2.8 million will be paid into the fund by this group. Former members of beneficial associations continue to pay premiums according to the rate schedules in effect at the time their life insurance agreements were assumed by the fund, but the Government makes no current contributions to the fund for these individuals as it does for employees covered under the regular program. A contingency reserve has been established and held by the insurer at interest under the policy covering members of beneficial associations. This reserve, which was estimated to be $6.6 million on June 30, 1965, will accumulate interest consistent with that provided under the regular program. The Commission has determined that the contingency reserve under the beneficial association program will be held at a level of $6 million to meet adverse fluctuation in future charges. Any amounts above this level at the end of the policy year December 31, 1965, and any subsequent policy year, will be returned to the fund. Financing.-Premium costs are met by withholding from the salaries of employees 25 cents biweekly for each $1 thousand of life insurance, contributions by the Government, and direct premium payments from beneficial association members. Operating results.-Earnings are retained to meet the cost of future benefits. U.S. CIVIL SERVICE COMMISSION EMPLOYEES' LIFE INSURANCE FUND Disposition Schedule of Selected Receipts and Premium Payments, Aug. 29, 1954, through June 30, 1965 [In thousands of dollars] Dis position of selected receipts: 99.0 RETIRED EMPLOYEES HEALTH BENEFITS FUND Program and Financing (in thousands of dollars) 18,282 Identification code 30-28-8445-0-8-654 Program by activities: Mortality and other claim charges through June 30, 1965. Expense and risk charges through June 30, 1965. 941,229 Operating costs, funded: 38,254 Premiums returned to Commission and deposited in life insurance fund... 1. Subscription charges to uniform plan carrier. 277,888 Balance to be accounted for at end of current year. 37,641 95,487 1,352,859 |