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The FECA provides income and medical cost protection to covered federal
civilian employees injured on the job and for those who have contracted
a work-related occupational disease, and beneficiaries of employees whose
death is attributable to a job-related injury or occupational disease.
Claims incurred for benefits under the FECA for the USPTO’s employees
are administered by the DOL and are paid ultimately by the USPTO.
The DOL estimated the future workers compensation liability by applying
actuarial procedures developed to estimate the liability for FECA benefits.
The actuarial liability estimates for FECA benefits include the expected
liability for death, disability, medical, and miscellaneous costs for
approved compensation cases, plus a component for incurred but not reported
claims. The actuarial liability is updated annually.
The DOL method of determining the liability uses historical benefit payment
patterns for a specific incurred period to predict the ultimate payments
for that period. Consistent with past practice, these projected annual
benefit payments have been discounted to present value using the OMB’s
economic assumptions for ten-year Treasury notes and bonds. Interest rate
assumptions utilized for discounting were as follows:
Interest Rate Assumptions Utilized for Discounting to Present Value
for FY 2006 and FY 2005
5.17% in year 1,
5.31% in year 2,
and thereafter |
4.53% in year 1,
5.02% in year 2,
and thereafter |
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Based on information provided by the DOL, the DOC estimated the USPTO’s
liability as of September 30, 2006 and 2005 to be $7,470 thousand and
$7,278 thousand, respectively.
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