USPTO Performance and Accountability Report - U.S. Patent and ...

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FINANCIAL SECTION
NOTE 10. Actuarial Liability
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:
2012 2011
2.29% in year 1, 3.54% in year 1,
3.14% in year 2, 4.03% in year 2,
and thereafter and thereafter
Based on information provided by the DOL, the U.S. Department of Commerce estimated the USPTO’s liability
as of September 30, 2012 and 2011 was $8,209 thousand and $8,406 thousand, respectively.
NOTE 11. Leases
Operating Leases:
The General Services Administration (GSA) negotiates long-term office space leases and levies rent charges,
paid by the USPTO, approximate to commercial rental rates. These operating lease agreements for the
USPTO’s office buildings expire at various dates between FY 2014 and FY 2024. During the years ended
September 30, 2012 and 2011, the USPTO paid $94,795 thousand and $89,762 thousand, respectively, to the
GSA for rent.
Under existing commitments, the future minimum lease payments as of September 30, 2012 are as follows:
Fiscal Year (Dollars in Thousands)
2013 $ 67,699
2014 66,366
2015 65,593
2016 64,284
2017 63,185
Thereafter 392,034
Total Future Minimum Lease Payments $ 719,161
PERFORMANCE AND ACCOUNTABILITY REPORT: FISCAL YEAR 2012