The District of Columbia Retirement Board (DCRB) was created by Congress in 1979 by the District of Columbia Retirement Reform Act (the Reform Act) as an independent agency of the District of Columbia to manage the District of Columbia Police Officers and Fire Fighters’ Retirement Fund and the District of Columbia Teachers’ Retirement Fund (the Funds) on an actuarially sound basis to finance retirement benefits for the District’s police officers, firefighters, and teachers covered under the District of Columbia Police Officers and Firefighters’ Retirement Plan and Teachers’ Retirement Plan (the Plans).
The Plans were originally created by the Federal government and under the Federal government’s control prior to the Reform Act. Plan benefits were financed on a pay-as-you-go basis and not pre-funded. Because the District government inherited a large unfunded pension liability from the Federal government, in 1997 the Funds were split between the Federal and District governments under the National Capital Revitalization and Self-Government Improvement Act of 1997 (the Revitalization Act). As a result, the Federal government is responsible for financing Plan benefits based on service up through June 30, 1997 (Federal Benefit Payments), and the District government is responsible for financing benefits based on service after June 30, 1997 (District Benefit Payments). The Police Officers, Fire Fighters, and Teachers Retirement Benefit Replacement Plan Act of 1998 (the Replacement Plan Act) established retirement plans for benefits based on service after June 30, 1997. These Plans are tax-qualified governmental defined benefit plans subject to applicable provisions under section 401(a) of the Internal Revenue Code.
In October 2005, DCRB was assigned responsibility for administering benefits under the Replacement Plan Act for the District. DCRB also is the third-party benefits administrator for Federal Benefit Payments under the terms of the Plans in place as of June 30, 1997, for the Federal government.
To avoid having two separate benefit payments from the Federal and District governments, the Federal government disburses all benefit payments and DCRB reimburses the Federal government for District Benefit Payments from the Funds. The Funds’ assets consist of employee and employer contributions and investment earnings. Employer contributions are determined using the entry-age normal cost method.