Federal Employees' Retirement System; Normal Cost Percentages, 35098 [2010-14827]

Download as PDF 35098 Federal Register / Vol. 75, No. 118 / Monday, June 21, 2010 / Notices Personnel Management, Room 4307, TABLE III—FERS PRESENT VALUE FACTORS FOR AGES AT CALCULA- 1900 E Street, NW., Washington, DC 20415. TION BELOW 40 [Applicable to annuity payable following an election under section 1043 of Public Law 104–106] Age at calculation 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Present value of a monthly annuity ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ ........................................ 292.3 291.4 290.3 289.3 288.1 286.9 285.7 284.5 283.1 281.8 280.4 279.0 277.5 275.9 274.3 272.6 270.9 269.0 267.1 265.2 263.2 261.1 258.9 U.S. Office of Personnel Management. John Berry, Director. [FR Doc. 2010–14830 Filed 6–18–10; 8:45 am] BILLING CODE 6325–39–P OFFICE OF PERSONNEL MANAGEMENT Federal Employees’ Retirement System; Normal Cost Percentages AGENCY: Office of Personnel Management. ACTION: Notice. The Office of Personnel Management (OPM) is providing notice of revised normal cost percentages for employees covered by the Federal Employees’ Retirement System (FERS) Act of 1986. DATES: The revised normal cost percentages are effective at the beginning of the first pay period commencing on or after October 1, 2010. Agency appeals of the normal cost percentages must be filed no later than December 21, 2010. ADDRESSES: Send or deliver agency appeals of the normal cost percentages and requests for actuarial assumptions and data to the Board of Actuaries, care of Gregory Kissel, Actuary, Office of Planning and Policy Analysis, Office of sroberts on DSKD5P82C1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 15:46 Jun 18, 2010 Jkt 220001 FOR FURTHER INFORMATION CONTACT: Christopher Ziebarth, (202) 606–0299. SUPPLEMENTARY INFORMATION: The FERS Act of 1986, Public Law 99–335, created a new retirement system intended to cover most Federal employees hired after 1983. Most Federal employees hired before 1984 are under the older Civil Service Retirement System (CSRS). Section 8423 of title 5, United States Code, as added by the FERS Act of 1986, provides for the payment of the Government’s share of the cost of the retirement system under FERS. Employees’ contributions are established by law and constitute only a small fraction of the cost of funding the retirement system; employing agencies are required to pay the remaining costs. The amount of funding required, known as ‘‘normal cost,’’ is the entry age normal cost of the provisions of FERS that relate to the Civil Service Retirement and Disability Fund (Fund). The normal cost must be computed by OPM in accordance with generally accepted actuarial practices and standards (using dynamic assumptions). Subpart D of part 841 of title 5, Code of Federal Regulations, regulates how normal costs are determined. Recently, the Board of Actuaries of the Civil Service Retirement System concluded that there should be no change to the set of economic assumptions used in the dynamic actuarial valuations of FERS. 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 existing rate of 6.25 percent. In addition, the Board anticipated a continued inflation rate of 3.50 percent, and a continued projected rate of General Schedule salary increases at 4.25 percent. These salary increases are in addition to assumed within-grade increases that reflect past experience. The economic 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 long-term inflation by .75 percent a year, with no difference from the current assumptions. The Board adopted changes in the mortality assumptions as well as changes in all the demographic assumptions listed as factors under PO 00000 Frm 00129 Fmt 4703 Sfmt 9990 § 841.404(a) of title 5, Code of Federal Regulations. In addition to the changes in mortality assumptions, the Board found that recent statutory changes, most significantly sections 1901 and 1904 of the National Defense Authorization Act for Fiscal Year 2010, Pubic Law 111–84, 123 Stat. 2109, and a recent decision of the U.S. Court of Appeals for the Federal Circuit, Adkins v. Office of Personnel Management, 525 F.3d 1363 (Fed. Cir. 2008), require increases in the normal costs. The normal cost calculations depend on economic, demographic, and mortality 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 changes in the demographic assumptions, the economic assumptions, and the other factors described above, OPM has determined the normal cost percentage for each category of employees under § 841.403 of title 5, Code of Federal Regulations. The Governmentwide normal cost percentages, including the employee contributions, are as follows: Members ....................................... Congressional employees ............ Law enforcement officers, members of the Supreme Court Police, firefighters, nuclear materials couriers, Customs and Border Protection Officers, and employees under section 302 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees ......................... Air traffic controllers ...................... Military reserve technicians .......... Employees under section 303 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees (when serving abroad) ...................................... All other employees ...................... 19.2% 17.7% 27.0% 26.8% 15.3% 17.6% 12.5% Under § 841.408 of title 5, Code of Federal Regulations, these normal cost percentages are effective at the beginning of the first pay period commencing on or after October 1, 2010. The time limit and address for filing agency appeals under §§ 841.409 through 841.412 of title 5, Code of Federal Regulations, are stated in the DATES and ADDRESSES sections of this notice. U.S. Office of Personnel Management. John Berry, Director. [FR Doc. 2010–14827 Filed 6–18–10; 8:45 am] BILLING CODE 6325–39–P E:\FR\FM\21JNN1.SGM 21JNN1

Agencies

Office of Personnel Management

[Federal Register Volume 75, Number 118 (Monday, June 21, 2010)]
[Notices]
[Page 35098]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-14827]


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OFFICE OF PERSONNEL MANAGEMENT


Federal Employees' Retirement System; Normal Cost Percentages

AGENCY: Office of Personnel Management.

ACTION: Notice.

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SUMMARY: The Office of Personnel Management (OPM) is providing notice 
of revised normal cost percentages for employees covered by the Federal 
Employees' Retirement System (FERS) Act of 1986.

DATES: The revised normal cost percentages are effective at the 
beginning of the first pay period commencing on or after October 1, 
2010. Agency appeals of the normal cost percentages must be filed no 
later than December 21, 2010.

ADDRESSES: Send or deliver agency appeals of the normal cost 
percentages and requests for actuarial assumptions and data to the 
Board of Actuaries, care of Gregory Kissel, Actuary, Office of Planning 
and Policy Analysis, Office of Personnel Management, Room 4307, 1900 E 
Street, NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Christopher Ziebarth, (202) 606-0299.

SUPPLEMENTARY INFORMATION: The FERS Act of 1986, Public Law 99-335, 
created a new retirement system intended to cover most Federal 
employees hired after 1983. Most Federal employees hired before 1984 
are under the older Civil Service Retirement System (CSRS). Section 
8423 of title 5, United States Code, as added by the FERS Act of 1986, 
provides for the payment of the Government's share of the cost of the 
retirement system under FERS. Employees' contributions are established 
by law and constitute only a small fraction of the cost of funding the 
retirement system; employing agencies are required to pay the remaining 
costs. The amount of funding required, known as ``normal cost,'' is the 
entry age normal cost of the provisions of FERS that relate to the 
Civil Service Retirement and Disability Fund (Fund). The normal cost 
must be computed by OPM in accordance with generally accepted actuarial 
practices and standards (using dynamic assumptions). Subpart D of part 
841 of title 5, Code of Federal Regulations, regulates how normal costs 
are determined.
    Recently, the Board of Actuaries of the Civil Service Retirement 
System concluded that there should be no change to the set of economic 
assumptions used in the dynamic actuarial valuations of FERS. 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 existing rate of 6.25 percent. In addition, the 
Board anticipated a continued inflation rate of 3.50 percent, and a 
continued projected rate of General Schedule salary increases at 4.25 
percent. These salary increases are in addition to assumed within-grade 
increases that reflect past experience. The economic 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 long-term inflation by .75 percent a year, 
with no difference from the current assumptions.
    The Board adopted changes in the mortality assumptions as well as 
changes in all the demographic assumptions listed as factors under 
Sec.  841.404(a) of title 5, Code of Federal Regulations. In addition 
to the changes in mortality assumptions, the Board found that recent 
statutory changes, most significantly sections 1901 and 1904 of the 
National Defense Authorization Act for Fiscal Year 2010, Pubic Law 111-
84, 123 Stat. 2109, and a recent decision of the U.S. Court of Appeals 
for the Federal Circuit, Adkins v. Office of Personnel Management, 525 
F.3d 1363 (Fed. Cir. 2008), require increases in the normal costs.
    The normal cost calculations depend on economic, demographic, and 
mortality 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 changes in the 
demographic assumptions, the economic assumptions, and the other 
factors described above, OPM has determined the normal cost percentage 
for each category of employees under Sec.  841.403 of title 5, Code of 
Federal Regulations. The Governmentwide normal cost percentages, 
including the employee contributions, are as follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Members......................................................      19.2%
Congressional employees......................................      17.7%
Law enforcement officers, members of the Supreme Court             27.0%
 Police, firefighters, nuclear materials couriers, Customs
 and Border Protection Officers, and employees under section
 302 of the Central Intelligence Agency Retirement Act of
 1964 for Certain Employees..................................
Air traffic controllers......................................      26.8%
Military reserve technicians.................................      15.3%
Employees under section 303 of the Central Intelligence            17.6%
 Agency Retirement Act of 1964 for Certain Employees (when
 serving abroad).............................................
All other employees..........................................      12.5%
------------------------------------------------------------------------

    Under Sec.  841.408 of title 5, Code of Federal Regulations, these 
normal cost percentages are effective at the beginning of the first pay 
period commencing on or after October 1, 2010.
    The time limit and address for filing agency appeals under 
Sec. Sec.  841.409 through 841.412 of title 5, Code of Federal 
Regulations, are stated in the DATES and ADDRESSES sections of this 
notice.

U.S. Office of Personnel Management.
John Berry,
Director.
[FR Doc. 2010-14827 Filed 6-18-10; 8:45 am]
BILLING CODE 6325-39-P

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