Federal Employees' Retirement System; Normal Cost Percentages, 32242-32243 [2011-13709]
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jlentini on DSK4TPTVN1PROD with NOTICES
32242
Federal Register / Vol. 76, No. 107 / Friday, June 3, 2011 / Notices
States Code; section 1902 of the
National Defense Authorization Act for
Fiscal Year 2010, Public Law 111–84.
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
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 (75 FR
35093) on June 21, 2010. 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
adopted by the Board of Actuaries of the
CSRS. Those changes 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 on October 1, 2011, 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, 2011. 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, 2010.
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
VerDate Mar<15>2010
15:49 Jun 02, 2011
Jkt 223001
Federal Regulations, is on or after
October 1, 2011. See 5 CFR 847.602(c)
and 847.603.
OPM is, therefore, revising the tables
of present value factors to read as
follows:
CSRS PRESENT VALUE FACTORS APPLICABLE TO ANNUITY PAYABLE FOLLOWING AN ELECTION UNDER SECTION 8339(j) OR (k) OR SECTION
8343a OF TITLE 5, UNITED STATES
CODE, OR UNDER SECTION 1043 OF
PUBLIC LAW 104–106 OR FOLLOWING A REDEPOSIT UNDER SECTION 8334(d)(2) OF TITLE 5, UNITED
STATES CODE
Present
value
factor
Age
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
PO 00000
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Frm 00108
Fmt 4703
Sfmt 4703
288.1
285.0
281.9
278.6
275.1
271.6
267.9
264.2
260.3
256.8
253.1
248.9
244.7
240.3
235.5
230.7
225.7
220.4
215.2
209.9
204.6
199.0
193.3
187.7
182.0
176.2
170.5
164.6
158.9
153.2
147.5
141.7
135.7
129.9
124.0
118.1
112.2
106.6
101.2
95.9
89.9
84.2
79.2
74.4
69.7
64.8
60.3
56.1
51.8
47.6
44.3
CSRS PRESENT VALUE FACTORS APPLICABLE TO ANNUITY PAYABLE FOLLOWING AN ELECTION UNDER SECTION 1043 OF PUBLIC LAW 104–106
(FOR AGES AT CALCULATION BELOW
40)
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
..........................................
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339.0
337.5
335.9
334.2
332.5
330.8
329.0
327.1
325.2
323.2
321.1
319.0
316.9
314.6
312.4
310.0
307.6
305.0
302.4
299.8
297.0
294.2
291.2
U.S. Office of Personnel Management.
John Berry,
Director.
[FR Doc. 2011–13708 Filed 6–2–11; 8:45 am]
BILLING CODE 6325–38–P
OFFICE OF PERSONNEL
MANAGEMENT
Federal Employees’ Retirement
System; Normal Cost Percentages
Office of Personnel
Management.
ACTION: Notice.
AGENCY:
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, 2011.
Agency appeals of the normal cost
percentages must be filed no later than
December 5, 2011.
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
SUMMARY:
E:\FR\FM\03JNN1.SGM
03JNN1
jlentini on DSK4TPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 107 / Friday, June 3, 2011 / Notices
Planning and Policy Analysis, Office of
Personnel Management, Room 4307,
1900 E Street NW., Washington, DC
20415.
FOR FURTHER INFORMATION CONTACT:
Kristine Prentice or Roxann Johnson,
(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.
In its meeting on June 11, 2010, the
Board of Actuaries of the Civil Service
Retirement System (the Board)
recommended changes to the 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. OPM has adopted the
Board’s recommendations.
Based on its analysis, the Board
concluded that it would be appropriate
to assume a rate of investment return of
5.75 percent, reduced from the existing
rate of 6.25 percent. In addition, the
Board determined that the assumed
inflation rate should be reduced from
3.50 percent to 3.00 percent and that the
projected rate of General Schedule
salary increases should be reduced from
4.25 percent to 3.75 percent. These
salary increases are in addition to
assumed within-grade increases that
reflect past experience. Each of these
assumptions is 0.50 percent lower than
the economic assumptions previously in
place. The Board’s recommendation
adjusts the nominal rates to balance
long-term expectations with recent
experience and better aligns the
assumptions with those used by the
VerDate Mar<15>2010
15:49 Jun 02, 2011
Jkt 223001
federal retirement programs
administered by the U.S. Department of
Defense and the Social Security
Administration. 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 0.75 percent a year, with no
difference from the current
assumptions. In 2008, the Board
adopted changes in the mortality
assumptions established in 2006 as well
as changes in all the demographic
assumptions listed as factors under
section 841.404(a) of title 5, Code of
Federal Regulations. These assumptions
remain unchanged.
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 current
demographic assumptions, and the
changed economic assumptions
described above, OPM has determined
the normal cost percentage for each
category of employees under section
841.403 of title 5, Code of Federal
Regulations. The Governmentwide
normal cost percentages, including the
employee contributions, are as follows:
Members—19.6%;
Congressional employees—18.0%;
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—
27.6%;
Air traffic controllers—27.3%;
Military reserve technicians—15.7%;
Employees under section 303 of the
Central Intelligence Agency Retirement
Act of 1964 for Certain Employees
(when serving abroad)—18.0%; and
All other employees—12.7%.
Under section 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, 2011.
The time limit and address for filing
agency appeals under sections 841.409
through 841.412 of title 5, Code of
Federal Regulations, are stated in the
DATES and ADDRESSES sections of this
notice.
PO 00000
Frm 00109
Fmt 4703
Sfmt 4703
32243
U.S. Office of Personnel Management.
John Berry,
Director.
[FR Doc. 2011–13709 Filed 6–2–11; 8:45 am]
BILLING CODE 6325–38–P
OFFICE OF PERSONNEL
MANAGEMENT
Federal Employees’ Retirement
System; Present Value Factors
Office of Personnel
Management.
ACTION: Notice.
AGENCY:
The Office of Personnel
Management (OPM) is providing notice
of adjusted present value factors
applicable to retirees who elect to
provide survivor annuity benefits to a
spouse based on post-retirement
marriage, and to retiring employees who
elect the alternative form of annuity or
elect to credit certain service with
nonappropriated fund instrumentalities.
This notice is necessary to conform the
present value factors to changes in the
economic assumptions adopted by the
Board of Actuaries of the Civil Service
Retirement System.
DATES: The revised present value factors
apply to survivor reductions or
employee annuities that commence on
or after October 1, 2011.
ADDRESSES: Send 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:
Kristine Prentice, (202) 606–0299.
SUPPLEMENTARY INFORMATION: Several
provisions of the Federal Employees’
Retirement System (FERS) 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 842.706(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. 8420a. That
SUMMARY:
E:\FR\FM\03JNN1.SGM
03JNN1
]]>Agencies
[Federal Register Volume 76, Number 107 (Friday, June 3, 2011)]
[Notices]
[Pages 32242-32243]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13709]
-----------------------------------------------------------------------
OFFICE OF PERSONNEL MANAGEMENT
Federal Employees' 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 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,
2011. Agency appeals of the normal cost percentages must be filed no
later than December 5, 2011.
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
[[Page 32243]]
Planning and Policy Analysis, Office of Personnel Management, Room
4307, 1900 E Street NW., Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT: Kristine Prentice or Roxann Johnson,
(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.
In its meeting on June 11, 2010, the Board of Actuaries of the
Civil Service Retirement System (the Board) recommended changes to the
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.
OPM has adopted the Board's recommendations.
Based on its analysis, the Board concluded that it would be
appropriate to assume a rate of investment return of 5.75 percent,
reduced from the existing rate of 6.25 percent. In addition, the Board
determined that the assumed inflation rate should be reduced from 3.50
percent to 3.00 percent and that the projected rate of General Schedule
salary increases should be reduced from 4.25 percent to 3.75 percent.
These salary increases are in addition to assumed within-grade
increases that reflect past experience. Each of these assumptions is
0.50 percent lower than the economic assumptions previously in place.
The Board's recommendation adjusts the nominal rates to balance long-
term expectations with recent experience and better aligns the
assumptions with those used by the federal retirement programs
administered by the U.S. Department of Defense and the Social Security
Administration. 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 0.75 percent a year, with no difference from the
current assumptions. In 2008, the Board adopted changes in the
mortality assumptions established in 2006 as well as changes in all the
demographic assumptions listed as factors under section 841.404(a) of
title 5, Code of Federal Regulations. These assumptions remain
unchanged.
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 current demographic
assumptions, and the changed economic assumptions described above, OPM
has determined the normal cost percentage for each category of
employees under section 841.403 of title 5, Code of Federal
Regulations. The Governmentwide normal cost percentages, including the
employee contributions, are as follows:
Members--19.6%;
Congressional employees--18.0%;
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--27.6%;
Air traffic controllers--27.3%;
Military reserve technicians--15.7%;
Employees under section 303 of the Central Intelligence Agency
Retirement Act of 1964 for Certain Employees (when serving abroad)--
18.0%; and
All other employees--12.7%.
Under section 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, 2011.
The time limit and address for filing agency appeals under sections
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. 2011-13709 Filed 6-2-11; 8:45 am]
BILLING CODE 6325-38-P
