## THE FUND’S INCOME POSITION FOR FY 2020—ACTUAL OUTCOME

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**Canonical URL:** [THE FUND’S INCOME POSITION FOR FY 2020—ACTUAL OUTCOME](https://www.imf.org/-/media/files/publications/pp/2020/english/ppea2020064.pdf)

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### Executive Summary
- Net operational income was about SDR 1.4 billion, slightly higher than estimated in the April supplement, mainly reflecting higher investment income.
- The unrealized pension-related adjustment in FY 2020, stemming mainly from the actuarial remeasurement of staff retirement plan assets and liabilities, was larger than previously estimated and more than offset net operational income, contributing to an overall net loss of about SDR 1.4 billion for the year.
- The GRA net loss was charged against the special reserve, after which precautionary balances amounted to SDR 16 billion at end-FY 2020.
- A transfer of currencies amounting to SDR 319 million was made during the second quarter of FY 2021 from the Investment Account to the GRA in accordance with decisions taken in April 2020.

### Review of the Income Position for FY 2020 — Key Findings
- Net operational income (Line C, Table 1) was SDR 1,422 million, SDR 66 million above the April Supplement projection of SDR 1,356 million.
- Total IAS 19 loss for FY 2020 amounted to SDR 2,971 million, SDR 596 million higher than the SDR 2,375 million estimated in the April Supplement.
- Net operational income/(loss) after IAS 19 losses (Line D, Table 1): GRA net loss of about SDR 1,549 million.
- Overall net income/(loss) position: SDR -1,447 million (Table 1).

### Lending Income
- Lending income: SDR 1,884 million (actual) versus SDR 1,889 million (April Supplement), difference: -5.
- Components:
  - Margin for the rate of charge: 667 (actual) — equal to projection.
  - Service and other charges: 9 (actual) versus 1 (projected), difference: -6.
  - Commitment fees: 37 (actual) versus 37 (projected), difference: 1.
  - Surcharges: 75 (actual) — equal to projection.
- Robust lending income reflects ongoing elevated use of Fund credit partly due to the Fund’s support to members to address the COVID-19 pandemic.
- Service charges were lower than projected following delays in some projected purchases under the Rapid Financing Instrument.

### Investment Income (Investment Account)
- Fixed-Income Subaccount investment income: SDR 319 million (actual) versus SDR 253 million (April Supplement), difference: 66.
  - Outperformance reflected the continued decline in bond yields and a sharp recovery in credit spreads in April.
- Endowment Subaccount investment income: SDR 112 million (actual) versus SDR -126 million (projected), difference: 238.
  - Endowment Subaccount (EA) reversed earlier projections of negative returns; assets recovered strongly in April amid central banks’ emergency policy responses while bond yields continued to decline.
- Interest free resources: SDR 45 million (actual) versus SDR 44 million (projected), difference: 1.

### IAS 19 (Pension-Related) Losses — Reconciliation (Table 2)
- Total IAS 19 losses: April Supplement projection -2,375; Actual outcome -2,971; difference -596.
- Actuarial (remeasurement) losses increased from -2,204 (projected) to -2,880 (actual).
  - Discount rate change effect: projected -1,654; actual -2,173.
  - Excess return on assets: projected -857; actual -944.
  - Other: projected 307; actual 237.
- Accrual vs. Funding: projected -171; actual -91 (reflecting mainly the gain from past service costs related to plan amendments under the Comprehensive Compensation and Benefits Review (CCBR) approved December 2019).
- Pension cost accrual: projected -320; actual -238.
- Pension funding: projected 149; actual 147.
- Discount rate at end of year: projected 2.97 percent; actual 2.73 percent.
- The change in the discount rate from 2.97 percent to 2.73 percent increased actuarial losses by SDR 519 million (part of the overall actuarial increase).

### Expenses and Reconciliation (Table 3 and Table 1)
- Total expenses: SDR 891 million (actual) versus SDR 895 million (projected), difference -4.
  - Net administrative expenditures: SDR 833 million (actual) versus SDR 832 million (projected), difference 1.
  - Capital budget items expensed: SDR 14 million (actual) versus SDR 18 million (projected), difference -4.
  - Depreciation: SDR 44 million (actual) — broadly in line with projection.
- Net operational income (A - B): SDR 1,422 million (actual) versus SDR 1,356 million (projected), difference 66.
- Net pension asset/(liability) (IAS 19) losses: -2,971 (actual) versus -2,375 (projected), difference -596.
- Endowment Subaccount investment income retained in the subaccount: SDR 112 million.
- Special Disbursement Account net income/(loss): SDR -10 (actual).

### Precautionary Balances and Memoranda
- Precautionary balances (end of period): SDR 16.0 billion (actual) versus SDR 16.5 billion (projected).
- Fund credit (average stock): 66.7 SDR billions (actual and projected).
- SDR interest rate (average): 0.8 percent (actual and projected).
- US$/SDR exchange rate (average): 1.38 (actual and projected).
- FY2020 average Credit outstanding: 66.7 (SDR billions).

### Decisions, Accounting Treatment, and Actions Taken
- No further decisions required at time of report; Executive Board decisions taken in April 2020 addressed necessary actions.
- GRA net loss for FY 2020 was charged against the special reserve consistent with Board decisions.
- Income from the Endowment Subaccount of SDR 112 million is retained in the subaccount and invested according to the Rules and Regulations for the Investment Account.
- Currencies equivalent to Fixed-Income Subaccount income of SDR 319 million were transferred from the Fixed-Income Subaccount to the GRA during the second quarter of FY 2021.
- No transfer of currencies is to be made from the GRA to the Fixed-Income Subaccount given the net GRA loss in FY 2020.

*Prepared by the Finance Department; document completed September 9, 2020.*

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_Source: https://www.imf.org/-/media/files/publications/pp/2020/english/ppea2020064.pdf_