U.S. Department of State Fiscal Year 2020 Agency Financial Report

Based upon the projection, the total liability reported for the Retirement and Voluntary Severance Lump Sum Payment is $593 million and $463 million as of September 30, 2020 and 2019, respectively, as shown below (dollars in millions) : At September 30, 2020 2019 Retirement $ 200 $ 154 Voluntary Severance 393 309 Total $ 593 $ 463 The September 30, 2020 total PBO of $593.1 million represents a $130.0 million increase compared to the September 30, 2019 total PBO of $463.1 million. Changes to the discount rate, merit salary increase, and inflation assumptions increased total PBO by about $72 million. Changes to the withdrawal and retirement assumptions further increased total PBO by about $25 million. The table below shows the changes in the projected benefit obligation during 2020 and 2019 (dollars in millions) : Changes in Benefit Obligations: 2020 2019 Benefit obligations beginning of year $ 463 $ 397 Normal Cost 36 30 Benefit Payments (33) (28) Interest Cost 13 12 Actuarial (gain) loss on assumptions 97 40 Actuarial (gain) loss due to experience 17 10 Other — 2 Benefit obligations end of year $ 593 $ 463 10 I nternational O rganizations L iability The Department’s Bureau of International Organization Affairs (IO) is responsible for the administration, development, and implementation of the United States’ policies in the United Nations (UN), international organizations, and UN peacekeeping operations. The United States contributes either to voluntary funds or an assessed share of the budgets and expenses of these organizations and activities. These missions are supported through Congressional appropriation to the Department’s Contributions to International Organizations (CIO), Contributions for International Peacekeeping Activities (CIPA), and International Organizations and Programs (IO&P) accounts. A liability is established for assessments received and unpaid and for pledges made and accepted by an international organization. Congress has mandated withholding the payments of dues because of policy restrictions or caps on the percentage of the organization’s operating costs financed by the United States. Without authorization from Congress, the Department cannot pay certain assessed amounts. The amounts of mandated withholdings that will likely not be authorized to be paid in the future do not appear as liabilities on the Balance Sheet of the Department. Amounts presented in the table represent amounts that are paid through the CIO, CIPA, and IO&P accounts and administered by IO. Payables to international organizations by the Department that are funded through other appropriations are included in Accounts Payable to the extent such payables exist at September 30, 2020 and 2019. The IO Liability decrease of $1.3 billion is largely attributed to timing differences in payments for CIPA and IO&P. Specifically, at the end of FY 2019 $1.1 billion of the ending IO liability was obligated for FY 2019 assessments which were subsequently paid in FY 2020. Further information about the Department’s mission to the UN is at usun.state.gov . Details of the IO Liability follow (dollars in millions) : As of September 30, 2020 2019 Regular Membership Assessments Payable to UN $ 1,090 $ 1,055 Dues Payable to UN Peacekeeping Missions 1,221 2,121 International Organizations Liability 935 1,310 Total Owed to International Organizations 3,246 4,486 Less Amounts Mandated to be Withheld and not likely to be Paid 728 683 International Organizations Liability $ 2,518 $ 3,803 Funded Amounts $ 259 $ 1,485 Unfunded Amounts 2,259 2,318 Total International Organizations Liability $ 2,518 $ 3,803 90 | U ni ted S tates D epartment of S tate 2020 A gency F inanci al R eport FINANCIAL SECTION | NOTES TO THE PRINCIPAL FINANCIAL STATEMENTS