[Appendix, Budget of the United States Government, Fiscal Year 1998]
[Page 409-410]

 
                           MILITARY RETIREMENT

                              Federal Funds

General and special funds:

                  Payment to Military Retirement Fund 

                         Program and Financing (in millions of dollars)

-----------------------------------------------------------------------------------------------
Identification code   97-0040-0-1-054    1996 actual      1997 est.     1998 est.      1999 est.
-----------------------------------------------------------------------------------------------

    Obligations by program activity:

10.00 Total obligations (object class 
        13.0)...........................      10,699         15,151        15,833         16,545
--------------------------------------------------------------------------------------------------
    Budgetary resources available for 
        obligation:

22.00 New budget authority (gross)......      10,699         15,151        15,833         16,545
23.95 New obligations...................     -10,699        -15,151       -15,833        -16,545
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    New budget authority (gross), 
        detail:

60.05 Appropriation (indefinite)........      10,699         15,151        15,833         16,545
--------------------------------------------------------------------------------------------------
    Change in unpaid obligations:

73.10 New obligations...................      10,699         15,151        15,833         16,545
73.20 Total outlays (gross).............     -10,699        -15,151       -15,833        -16,545
--------------------------------------------------------------------------------------------------
    Outlays (gross), detail:

86.97 Outlays from new permanent 
        authority.......................      10,699         15,151        15,833         16,545
--------------------------------------------------------------------------------------------------
    Net budget authority and outlays:

89.00 Budget authority..................      10,699         15,151        15,833         16,545
90.00 Outlays...........................      10,699         15,151        15,833         16,545
-----------------------------------------------------------------------------------------------

    The 1998 payment to the military retirement fund includes funds for 
the amortization of the unfunded liability for all retirement benefits 
earned by military personnel for service prior to 1985. The amortization 
schedule for the unfunded liability is determined by the Department of 
Defense Retirement Board of Actuaries. For fiscal year 1997 and beyond, 
the Board adjusted the amortization schedule to reflect a 50 year rather 
than a 60 year stream of payments. Included in the unfunded liability 
are the consolidated requirements of the military departments to cover 
retired officers and enlisted personnel of the Army, Navy, Marine Corps, 
and Air Force, retainer pay of enlisted personnel of the Fleet Reserve 
of the Navy and Marine Corps, and survivors benefits.

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[[Page 410]]

                               Trust Funds

                        Military Retirement Fund 

              Unavailable Collections (in millions of dollars)

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Identification code 97-8097-0-7-602      1996 actual   1997 est.   1998 est.
----------------------------------------------------------------------------
    Balance, start of year:
01.99 Balance, start of year............     124,331     128,713     136,449
    Receipts:
02.01 Employing agency contributions....      11,174      11,180      10,544
02.02 General fund payment (unfunded 
        liability)......................      10,699      15,151      15,833
02.03 Earnings on investments...........      11,501      11,600      11,800
                                           ---------   ---------  ----------
02.99   Total receipts..................      33,374      37,931      38,177
                                           ---------   ---------  ----------
04.00 Total: Balances and collections...     157,705     166,644     174,626
    Appropriation:
05.01 Military retirement fund..........     -28,992     -30,195     -31,345
                                           ---------   ---------  ----------
05.99 Subtotal appropriation............     -28,992     -30,195     -31,345
07.99 Total balance, end of year........     128,713     136,449     143,281
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                Program and Financing (in millions of dollars)

----------------------------------------------------------------------------
Identification code 97-8097-0-7-602      1996 actual   1997 est.   1998 est.
----------------------------------------------------------------------------

    Obligations by program activity:
00.01 Nondisability.....................      24,839      25,870      26,855
00.02 Temporary disability..............          91          95          99
00.03 Permanent disability..............       1,414       1,473       1,529
00.04 Fleet Reserve.....................       1,142       1,190       1,235
00.05 Survivors' benefits...............       1,505       1,568       1,627
                                           ---------   ---------  ----------
10.00   Total obligations (object class 
          42.0).........................      28,991      30,195      31,345
----------------------------------------------------------------------------

    Budgetary resources available for obligation:
22.00 New budget authority (gross)......      28,991      30,195      31,345
23.95 New obligations...................     -28,991     -30,195     -31,345
----------------------------------------------------------------------------

    New budget authority (gross), detail:
60.27 Appropriation (trust fund, 
        indefinite).....................      33,272      37,931      38,177
60.45 Portion precluded from obligation.      -4,280      -7,736      -6,832
                                           ---------   ---------  ----------
63.00   Appropriation (total)...........      28,991      30,195      31,345
                                           ---------   ---------  ----------
70.00   Total new budget authority 
          (gross).......................      28,991      30,195      31,345
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    Change in unpaid obligations:
72.41 Unpaid obligations, start of year: 
        Obligated balance: U.S. 
        Securities: Par value...........       2,375       2,536       2,626
73.10 New obligations...................      28,991      30,195      31,345
73.20 Total outlays (gross).............     -28,831     -30,105     -31,251
74.41 Unpaid obligations, end of year: 
        Obligated balance: U.S. 
        Securities: Par value...........       2,536       2,626       2,720
----------------------------------------------------------------------------

    Outlays (gross), detail:
86.97 Outlays from new permanent 
        authority.......................      28,831      30,105      31,251
----------------------------------------------------------------------------

    Net budget authority and outlays:
89.00 Budget authority..................      28,991      30,195      31,345
90.00 Outlays...........................      28,831      30,105      31,251
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    Public Law 98-94 provided for accrual funding of the military 
retirement system and for the establishment of a Department of Defense 
Military Retirement Fund in 1985. The fund is financed through Federal 
contributions for retired pay and retirement pay of military personnel 
on the retired lists of the Army, Navy, Marine Corps, and Air Force, 
including the reserve components thereof, and retainer pay for personnel 
of the Inactive Fleet Reserve, Government contributions consisting of a 
normal cost accrual percentage applied to basic pay amounts contained in 
the military personnel appropriations, and interest on investments.

    The status of the fund is as follows: 

                  Status of Funds (in millions of dollars)

----------------------------------------------------------------------------
Identification code 97-8097-0-7-602      1996 actual   1997 est.   1998 est.
----------------------------------------------------------------------------
    Unexpended balance, start of year:
0100  Treasury balance..................         -22          58
      U.S. Securities:

0101    Par value.......................     112,963     116,991     125,376
0102    Unrealized discounts............      13,766      14,201      13,698
                                           ---------   ---------  ----------
0199    Total balance, start of year....     126,707     131,250     139,074
    Cash income during the year:
      Intragovernmental transactions:

0240    Employing agency contributions, 
          DOD military..................      11,170      11,176      10,540
0241    Employing agency contributions, 
          Corps of Engineers............           4           4           4
0242    Earning on investments..........      11,501      11,600      11,800
0243    Federal contributions...........      10,699      15,151      15,833
                                           ---------   ---------  ----------
0299    Total cash income...............      33,374      37,931      38,177
    Cash outgo during year:
0500  Military retirement fund..........     -28,831     -30,105     -31,251
    Unexpended balance, end of year:
0700  Uninvested balance................          58
      U.S. Securities:

0701    Par value.......................     116,991     125,376     132,302
0702    Unrealized discounts............      14,201      13,698      13,698
                                           ---------   ---------  ----------
0799    Total balance, end of year......     131,250     139,074     146,000
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