Note 12. Federal Employee Benefits

These liabilities consist of:

Federal Employee Benefits Liabilities
(In Thousands)

	FY 2007	FY 2006
Actuarial FECA Liability	$164,416	$170,164
NOAA Corps Retirement System Liability	416,000	370,600
NOAA Corps Post-retirement Health Benefits Liability	45,400	49,200
Total	$625,816	$589,964

Actuarial FECA Liability:

Actuarial FECA liability is calculated annually, as of September 30. For discounting projected annual future benefit payments to present value, the interest rate assumptions used by DOL were as follows:

The wage inflation factors (Cost of Living Allowance) and medical inflation factors (Consumer Price Index - Medical) applied to the calculation of projected future benefits, and also used to adjust the methodology’s historical payments to current year constant dollars, were as follows:

NOAA Corps Retirement System Liability:

This liability represents the unfunded actuarial present value of projected plan benefits. The actuarial calculation is performed annually, as of September 30. The September 30, 2007 and 2006 actuarial calculations used the following U.S. Department of Defense Retirement Board of Actuaries economic assumptions:

The related pension costs included in the Consolidated Statements of Net Cost are as follows:

Related Pension Costs
(In Thousands)

	FY 2007	FY 2006
Normal Cost	$ 5,100	$ 6,000
Interest on the Unfunded Liability	22,600	21,400
Prior and Past Service Cost from Plan Amendments	10,200	-
Actuarial (Gains) Losses, Net
Impact of New Investment Return	14,600	-
Impact of Updated Data for Active Duty Members, Retirees, and Survivors	6,100	12,200
Impact of New Demographic Assumptions	5,500	(1,900)
Total Pension Costs	$64,100	$37,700

The Prior and Past Service Cost from Plan Amendments for FY 2007 results from two recent law changes: a) effective January 1, 2007, the 75 percent of base pay maximum for non-disability retirements was eliminated; and b) effective April 1, 2008, the reduction in benefits payable under the Survivor Benefits Plan that applied when the survivor reached age 62 will be fully phased out.

NOAA Corps Post-retirement Health Benefits Liability:

This liability represents the unfunded actuarial present value of projected post-retirement plan benefits. The actuarial calculation is performed annually, as of September 30. The actuarial calculations used the same U.S. Department of Defense Retirement Board of Actuaries economic assumptions as used for the NOAA Corps Retirement System actuarial calculations.

The related post-retirement health benefits costs included in the Consolidated Statements of Net Cost are as follows:

Related Post-Retirement Health Benefits Costs
(In Thousands)

	FY 2007	FY 2006
Normal Cost	$1,200	$2,800
Interest on the Unfunded Liability	2,900	2,700
Actuarial (Gains)/Losses, Net	(4,900)	1,300
Total Post-retirement Health Benefits Costs	$ (800)	$6,800