Civil Service Retirement System; Normal Cost Percentages, 31627-31628 [E7-11082]
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Federal Register / Vol. 72, No. 109 / Thursday, June 7, 2007 / Notices
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rwilkins on PROD1PC63 with NOTICES
ADDRESSES:
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Antitrust Reviews, published December
1997, in its entirety.
Dated at Rockville, Maryland, this 29th day
of May, 2007.
For the Nuclear Regulatory Commission.
Michael J. Case,
Director, Division of Policy and Rulemaking,
Office of Nuclear Reactor Regulation.
[FR Doc. E7–10945 Filed 6–6–07; 8:45 am]
BILLING CODE 7590–01–P
OFFICE OF PERSONNEL
MANAGEMENT
Civil Service Retirement System;
Normal Cost Percentages
Office of Personnel
Management.
ACTION: Notice.
AGENCY:
SUMMARY: The Office of Personnel
Management (OPM) is providing notice
of revised normal cost percentages for
employees covered by the Civil Service
Retirement System (CSRS).
DATES: The revised normal cost
percentages are effective at the
beginning of the first pay period
commencing on or after October 1, 2007.
ADDRESSES: Send or deliver requests for
actuarial assumptions and data to the
Board of Actuaries, care of Gregory
Kissel, Manager, Office of Actuaries,
Strategic Human Resources Policy
Division, Office of Personnel
Management, Room 4307, Washington,
DC 20415.
FOR FURTHER INFORMATION CONTACT:
Jessica Johnson, (202) 606–0299.
SUPPLEMENTARY INFORMATION: Most
Federal employees hired before 1984 are
under the Civil Service Retirement
System (CSRS). Section 8334 of title 5,
United States Code, provides for the
mandated percentage of basic pay as an
employee deduction and agency
contributions that are paid into the Civil
Service Retirement and Disability Fund
(Fund) for CSRS. The ‘‘normal cost’’ is
the percentage of salary that must be
contributed at the time service is
performed in order to pay the full cost
of retirement benefits, assuming that the
contributions begin at first creditable
employment, and that the system will
continue. The normal cost percentages
change from time to time based upon
changes in the underlying economic
assumptions. To fully fund the
retirement system, the normal cost
percentage of basic pay must be paid
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
31627
into the Retirement Fund at the time
service is performed. Under CSRS, the
employee deductions and agency
contributions are statutorily mandated
and unlike FERS, CSRS is not fully
funded. The normal costs for CSRS
reflect the percentage of basic pay that
would have to be contributed to the
Fund for CSRS to be fully funded.
Additionally, there are a few entities
that must pay the full normal cost for
their CSRS employees.
CSRS offset refers to those employees
who are simultaneously covered by the
Old Age, Survivors, and Disability
Insurance (OASDI) tax and CSRS.
Section 8334(k) of title 5, United States
Code, and subpart J of part 831 of title
5, Code of Federal Regulations, describe
the employee deductions and agency
contributions for CSRS offset. Normal
cost percentages are different for regular
CSRS and CSRS offset because of
differences in their benefit structures.
Recently, the Board of Actuaries of
the Civil Service Retirement System
approved a revised set of economic
assumptions for use in the dynamic
actuarial valuations of CSRS. These
assumptions were adopted after the
Board reviewed statistical data prepared
by the OPM actuaries and considered
trends that may affect future experience
under the System.
Based on its analysis, the Board
concluded that it would be appropriate
to assume a rate of investment return of
6.25 percent, with no difference from
the current rate of 6.25 percent. The
Board increased the anticipated
inflation rate from 3.25 percent to 3.50
percent, and increased the projected rate
of General Schedule salary increases
from 4.00 percent to 4.25 percent. These
salary increases are in addition to
assumed within-grade increases that
reflect past experience.
The new assumptions anticipate that,
over the long term, the annual rate of
investment return will exceed inflation
by 2.75 percent and General Schedule
salary increases will exceed inflation by
.75 percent a year, as compared to 3
percent and .75 percent, respectively,
under the previous assumptions.
The normal cost calculations depend
on both the economic and demographic
assumptions. The demographic
assumptions are determined separately
for each of a number of special groups,
in cases where separate experience data
is available. Based on the new economic
assumptions and the change in the
demographic assumption concerning
the rate of early retirements, OPM has
determined the normal cost percentage
for each category of employees. The
Government wide normal cost
percentages for CSRS, without offset,
E:\FR\FM\07JNN1.SGM
07JNN1
31628
Federal Register / Vol. 72, No. 109 / Thursday, June 7, 2007 / Notices
including the employee contributions,
are as follows:
Percent
Members .......................................
Congressional employees ............
Law enforcement officers, members of the Supreme Court Police, firefighters, nuclear materials couriers and employees
under section 302 of the Central Intelligence Agency Retirement Act of 1964 for Certain
Employees ................................
Air traffic controllers ......................
All other employees, without offset .............................................
29.4
34.9
42.5
38.9
25.2
The Government wide normal cost
percentages for CSRS offset, including
the employee contributions, are as
follows:
Percent
Members offset .............................
Congressional employees offset ..
Law enforcement officers, members of the Supreme Court Police, firefighters, nuclear materials couriers and employees
under section 302 of the Central Intelligence Agency Retirement Act of 1964 for Certain
Employees offset ......................
Air traffic controllers offset ............
All other employees, with offset ...
27.1
29.9
38.0
34.6
19.5
These normal cost percentages are
effective at the beginning of the first pay
period commencing on or after October
1, 2007.
Office of Personnel Management.
Linda M. Springer,
Director.
[FR Doc. E7–11082 Filed 6–6–07; 8:45 am]
BILLING CODE 6325–38–P
OFFICE OF PERSONNEL
MANAGEMENT
Civil Service Retirement System;
Present Value Factors
Office of Personnel
Management.
ACTION: Notice.
rwilkins on PROD1PC63 with NOTICES
AGENCY:
SUMMARY: The Office of Personnel
Management (OPM) is providing notice
of adjusted present value factors
applicable to retirees under the Civil
Service Retirement System (CSRS) who
elect to provide survivor annuity
benefits to a spouse based on postretirement marriage and to retiring
employees who elect the alternative
form of annuity, owe certain redeposits
based on refunds of contributions for
service before October 1, 1990, or elect
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20:59 Jun 06, 2007
Jkt 211001
to credit certain service with
nonappropriated fund instrumentalities.
This notice is necessary to conform the
present value factors to changes in
economic assumptions and
demographic factors adopted by the
Board of Actuaries of the Civil Service
Retirement System.
DATES: Effective Date: The revised
present value factors apply to survivor
reductions or employee annuities that
commence on or after October 1, 2007.
ADDRESSES: Send requests for actuarial
assumptions and data to the Board of
Actuaries, care of Gregory Kissel,
Manager, Office of Actuaries, Strategic
Human Resources Policy Division,
Office of Personnel Management, Room
4307, Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT:
Jessica Johnson, (202) 606–0299.
SUPPLEMENTARY INFORMATION: Several
provisions of CSRS require reduction of
annuities on an actuarial basis. Under
each of these provisions, OPM is
required to issue regulations on the
method of determining the reduction to
ensure that the present value of the
reduced annuity plus a lump sum
equals, to the extent practicable, the
present value of the unreduced benefit.
The regulations for each of these
benefits provide that OPM will publish
a notice in the Federal Register
whenever it changes the factors used to
compute the present values of these
benefits.
Section 831.2205(a) of title 5, Code of
Federal Regulations, prescribes the
method for computing the reduction in
the beginning rate of annuity payable to
a retiree who elects an alternative form
of annuity under 5 U.S.C. 8343a. That
reduction is required to produce an
annuity that is the actuarial equivalent
of the annuity of a retiree who does not
elect an alternative form of annuity. The
present value factors listed below are
used to compute the annuity reduction
under section 831.2205(a) of title 5,
Code of Federal Regulations.
Section 831.303(c) of title 5, Code of
Federal Regulations, prescribes the use
of these factors for computing the
reduction to complete payment of
certain redeposits of refunded
deductions based on periods of service
that ended before October 1, 1990,
under section 8334(d)(2) of title 5,
United States Code.
Section 831.663 of title 5, Code of
Federal Regulations, prescribes the use
of similar factors for computing the
reduction required for certain elections
to provide survivor annuity benefits
based on a post-retirement marriage
under section 8339(j)(5)(C) or (k)(2) of
title 5, United States Code. Under
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Frm 00080
Fmt 4703
Sfmt 4703
section 11004 of the Omnibus Budget
Reconciliation Act of 1993, Public Law
103–66, effective October 1, 1993, OPM
ceased collection of these survivor
election deposits by means of either a
lump-sum payment or installments.
Instead, OPM is required to establish a
permanent actuarial reduction in the
annuity of the retiree. This means that
OPM must take the amount of the
deposit computed under the old law
and translate it into a lifetime reduction
in the retiree’s benefit. The reduction is
based on actuarial tables, similar to
those used for alternative forms of
annuity under section 8343a of title 5,
United States Code.
Subpart F of part 847 of title 5, Code
of Federal Regulations, prescribes the
use of similar factors for computing the
deficiency the retiree must pay to
receive credit for certain service with
nonappropriated fund instrumentalities
made creditable by an election under
section 1043 of Public Law 104–106.
The present value factors currently in
effect were published by OPM (69 FR
52944) on August 30, 2004. Elsewhere
in today’s Federal Register, OPM
published a notice to revise the normal
cost percentage under the Federal
Employees’ Retirement System (FERS)
Act of 1986, Public Law 99–335, based
on changed economic assumptions and
demographic factors adopted by the
Board of Actuaries of the CSRS. Those
changed economic assumptions require
corresponding changes in CSRS normal
costs and present value factors used to
produce actuarially equivalent benefits
when required by the Civil Service
Retirement Act. The revised factors will
become effective in October 2007 to
correspond with the changes in CSRS
normal cost percentages. For alternative
forms of annuity and redeposits of
employee contributions, the new factors
will apply to annuities that commence
on or after October 1, 2007. See 5 CFR
831.2205 and 831.303(c). For survivor
election deposits, the new factors will
apply to survivor reductions that
commence on or after October 1, 2007.
See 5 CFR 831.663(c) and (d). For
obtaining credit for service with certain
nonappropriated fund instrumentalities,
the new factors will apply to cases in
which the date of computation under
section 847.603 of title 5, Code of
Federal Regulations, is on or after
October 1, 2007. See 5 CFR 847.602(c)
and 847.603.
OPM is, therefore, revising the tables
of present value factors to read as
follows:
E:\FR\FM\07JNN1.SGM
07JNN1
]]>Agencies
[Federal Register Volume 72, Number 109 (Thursday, June 7, 2007)]
[Notices]
[Pages 31627-31628]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-11082]
=======================================================================
-----------------------------------------------------------------------
OFFICE OF PERSONNEL MANAGEMENT
Civil Service Retirement System; Normal Cost Percentages
AGENCY: Office of Personnel Management.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Office of Personnel Management (OPM) is providing notice
of revised normal cost percentages for employees covered by the Civil
Service Retirement System (CSRS).
DATES: The revised normal cost percentages are effective at the
beginning of the first pay period commencing on or after October 1,
2007.
ADDRESSES: Send or deliver requests for actuarial assumptions and data
to the Board of Actuaries, care of Gregory Kissel, Manager, Office of
Actuaries, Strategic Human Resources Policy Division, Office of
Personnel Management, Room 4307, Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT: Jessica Johnson, (202) 606-0299.
SUPPLEMENTARY INFORMATION: Most Federal employees hired before 1984 are
under the Civil Service Retirement System (CSRS). Section 8334 of title
5, United States Code, provides for the mandated percentage of basic
pay as an employee deduction and agency contributions that are paid
into the Civil Service Retirement and Disability Fund (Fund) for CSRS.
The ``normal cost'' is the percentage of salary that must be
contributed at the time service is performed in order to pay the full
cost of retirement benefits, assuming that the contributions begin at
first creditable employment, and that the system will continue. The
normal cost percentages change from time to time based upon changes in
the underlying economic assumptions. To fully fund the retirement
system, the normal cost percentage of basic pay must be paid into the
Retirement Fund at the time service is performed. Under CSRS, the
employee deductions and agency contributions are statutorily mandated
and unlike FERS, CSRS is not fully funded. The normal costs for CSRS
reflect the percentage of basic pay that would have to be contributed
to the Fund for CSRS to be fully funded. Additionally, there are a few
entities that must pay the full normal cost for their CSRS employees.
CSRS offset refers to those employees who are simultaneously
covered by the Old Age, Survivors, and Disability Insurance (OASDI) tax
and CSRS. Section 8334(k) of title 5, United States Code, and subpart J
of part 831 of title 5, Code of Federal Regulations, describe the
employee deductions and agency contributions for CSRS offset. Normal
cost percentages are different for regular CSRS and CSRS offset because
of differences in their benefit structures.
Recently, the Board of Actuaries of the Civil Service Retirement
System approved a revised set of economic assumptions for use in the
dynamic actuarial valuations of CSRS. These assumptions were adopted
after the Board reviewed statistical data prepared by the OPM actuaries
and considered trends that may affect future experience under the
System.
Based on its analysis, the Board concluded that it would be
appropriate to assume a rate of investment return of 6.25 percent, with
no difference from the current rate of 6.25 percent. The Board
increased the anticipated inflation rate from 3.25 percent to 3.50
percent, and increased the projected rate of General Schedule salary
increases from 4.00 percent to 4.25 percent. These salary increases are
in addition to assumed within-grade increases that reflect past
experience.
The new assumptions anticipate that, over the long term, the annual
rate of investment return will exceed inflation by 2.75 percent and
General Schedule salary increases will exceed inflation by .75 percent
a year, as compared to 3 percent and .75 percent, respectively, under
the previous assumptions.
The normal cost calculations depend on both the economic and
demographic assumptions. The demographic assumptions are determined
separately for each of a number of special groups, in cases where
separate experience data is available. Based on the new economic
assumptions and the change in the demographic assumption concerning the
rate of early retirements, OPM has determined the normal cost
percentage for each category of employees. The Government wide normal
cost percentages for CSRS, without offset,
[[Page 31628]]
including the employee contributions, are as follows:
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Members...................................................... 29.4
Congressional employees...................................... 34.9
Law enforcement officers, members of the Supreme Court 42.5
Police, firefighters, nuclear materials couriers and
employees under section 302 of the Central Intelligence
Agency Retirement Act of 1964 for Certain Employees.........
Air traffic controllers...................................... 38.9
All other employees, without offset.......................... 25.2
------------------------------------------------------------------------
The Government wide normal cost percentages for CSRS offset,
including the employee contributions, are as follows:
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Members offset............................................... 27.1
Congressional employees offset............................... 29.9
Law enforcement officers, members of the Supreme Court 38.0
Police, firefighters, nuclear materials couriers and
employees under section 302 of the Central Intelligence
Agency Retirement Act of 1964 for Certain Employees offset..
Air traffic controllers offset............................... 34.6
All other employees, with offset............................. 19.5
------------------------------------------------------------------------
These normal cost percentages are effective at the beginning of the
first pay period commencing on or after October 1, 2007.
Office of Personnel Management.
Linda M. Springer,
Director.
[FR Doc. E7-11082 Filed 6-6-07; 8:45 am]
BILLING CODE 6325-38-P
