Federal Employees' Retirement System; Normal Cost Percentages, 29224-29225 [2014-11771]
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Federal Register / Vol. 79, No. 98 / Wednesday, May 21, 2014 / Notices
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, 2014.
Agency appeals of the normal cost
percentages must be filed no later than
November 21, 2014.
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, Senior Actuary, Office
of Planning and Policy Analysis, Office
of Personnel Management, Room 4307,
1900 E Street NW., Washington, DC
20415.
FOR FURTHER INFORMATION CONTACT:
Karla Yeakle, (202) 606–0299.
SUPPLEMENTARY INFORMATION: The FERS
Act of 1986, Pub. L. 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
SUMMARY:
retirement system under FERS.
Employees’ contributions are
established by law and constitute only
a portion 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 July 13, 2012, the
Board of Actuaries of the Civil Service
Retirement System (the Board) reviewed
statistical data prepared by the OPM
actuaries and considered trends that
may affect future experience under
FERS. The Board recommended changes
to certain economic assumptions and
also changes to the demographic
assumptions used in the actuarial
valuations of FERS. OPM has adopted
the Board’s recommendations.
With regard to the economic
assumptions described under section
841.402 of title 5, Code of Federal
Regulations, used in the actuarial
valuations of FERS, the Board
concluded that it would be appropriate
to assume a rate of investment return of
5.25 percent, a reduction of 0.50 percent
from the existing rate of 5.75 percent. In
addition, the Board determined that the
assumed inflation rate should remain at
3.00 percent and that the projected rate
of General Schedule salary increases
should be reduced 0.50 percent from
3.75 percent to 3.25 percent. These
salary increases are in addition to
assumed within-grade increases. The
Board’s recommendation adjusts the
nominal rates to balance long-term
expectations with recent experience.
The economic assumptions anticipate
that, over the long term, the annual rate
of investment return will exceed
inflation by 2.25 percent and General
Schedule salary increases will exceed
long-term inflation by 0.25 percent a
year, both a decrease of 0.50 percent
from the previous assumptions. In
addition, the Board also adopted
changes to the demographic
assumptions listed as factors under
section 841.404(a) of title 5, Code of
Federal Regulations.
The normal cost calculations depend
on 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 changed
demographic and 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.
Section 5001 of Public Law 112–96,
The Middle Class Tax Relief and Jobs
Creation Act of 2012, established
provisions for FERS Revised Annuity
Employees (FERS–RAE). The law
permanently increases the retirement
contributions by 2.30 percent of pay for
these employees. Separate normal cost
rates will apply for FERS–RAE.
The Governmentwide normal cost
percentages, including the employee
contributions, are as follows:
NORMAL COST PERCENTAGES FOR FERS AND FERS–REVISED ANNUITY EMPLOYEE (RAE) GROUPS
FERS normal
cost
(percent)
mstockstill on DSK4VPTVN1PROD with NOTICES
Group
Members ..................................................................................................................................................................
Congressional employees, except members of the Capitol Police .........................................................................
Congressional employees who are members of the Capitol Police .......................................................................
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 regular FERS employees ..........................................................................................................................
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, 2014.
VerDate Mar<15>2010
17:42 May 20, 2014
Jkt 232001
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
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
FERS–RAE
normal cost
(percent)
21.5
19.7
19.7
14.2
14.2
19.7
30.1
32.4
17.7
30.1
32.5
18.1
19.7
14.0
19.9
14.2
and ADDRESSES sections of this
notice.
DATES
E:\FR\FM\21MYN1.SGM
21MYN1
Federal Register / Vol. 79, No. 98 / Wednesday, May 21, 2014 / Notices
U.S. Office of Personnel Management.
Katherine Archuleta,
Director.
[FR Doc. 2014–11771 Filed 5–20–14; 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.
AGENCY:
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 March 1, 1991, 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 and demographic
assumptions 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, 2014.
ADDRESSES: Send requests for actuarial
assumptions and data to the Board of
Actuaries, care of Gregory Kissel, Senior
Actuary, Office of Planning and Policy
Analysis, Office of Personnel
Management, Room 4307, 1900 E Street
NW., Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT:
Karla Yeakle, (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
mstockstill on DSK4VPTVN1PROD with NOTICES
SUMMARY:
VerDate Mar<15>2010
17:42 May 20, 2014
Jkt 232001
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 § 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 March 1, 1991, under
section 8334(d)(2) of title 5, United
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 (76 FR
32241) on June 3, 2011. On May 21,
2014 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
assumptions adopted by the Board of
Actuaries of the CSRS. Those changes
require corresponding changes in CSRS
normal costs and present value factors
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
29225
used to produce actuarially equivalent
benefits when required by the Civil
Service Retirement Act. The revised
factors will become effective on October
1, 2014, 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,
2014. 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, 2014. 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 § 847.603 of title 5,
Code of Federal Regulations, is on or
after October 1, 2014. 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
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
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..........................................
E:\FR\FM\21MYN1.SGM
21MYN1
Present value
factor
324.2
320.4
316.4
312.4
308.2
303.8
299.4
294.7
290.0
285.0
280.0
274.9
269.7
264.5
259.1
253.6
248.0
242.3
236.5
230.5
224.4
218.3
212.1
205.8
199.4
192.9
186.4
179.9
173.3
166.7
]]>Agencies
[Federal Register Volume 79, Number 98 (Wednesday, May 21, 2014)]
[Notices]
[Pages 29224-29225]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11771]
[[Page 29224]]
-----------------------------------------------------------------------
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,
2014. Agency appeals of the normal cost percentages must be filed no
later than November 21, 2014.
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, Senior Actuary, Office of
Planning and Policy Analysis, Office of Personnel Management, Room
4307, 1900 E Street NW., Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT: Karla Yeakle, (202) 606-0299.
SUPPLEMENTARY INFORMATION: The FERS Act of 1986, Pub. L. 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 portion 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 July 13, 2012, the Board of Actuaries of the
Civil Service Retirement System (the Board) reviewed statistical data
prepared by the OPM actuaries and considered trends that may affect
future experience under FERS. The Board recommended changes to certain
economic assumptions and also changes to the demographic assumptions
used in the actuarial valuations of FERS. OPM has adopted the Board's
recommendations.
With regard to the economic assumptions described under section
841.402 of title 5, Code of Federal Regulations, used in the actuarial
valuations of FERS, the Board concluded that it would be appropriate to
assume a rate of investment return of 5.25 percent, a reduction of 0.50
percent from the existing rate of 5.75 percent. In addition, the Board
determined that the assumed inflation rate should remain at 3.00
percent and that the projected rate of General Schedule salary
increases should be reduced 0.50 percent from 3.75 percent to 3.25
percent. These salary increases are in addition to assumed within-grade
increases. The Board's recommendation adjusts the nominal rates to
balance long-term expectations with recent experience. The economic
assumptions anticipate that, over the long term, the annual rate of
investment return will exceed inflation by 2.25 percent and General
Schedule salary increases will exceed long-term inflation by 0.25
percent a year, both a decrease of 0.50 percent from the previous
assumptions. In addition, the Board also adopted changes to the
demographic assumptions listed as factors under section 841.404(a) of
title 5, Code of Federal Regulations.
The normal cost calculations depend on 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 changed demographic and 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.
Section 5001 of Public Law 112-96, The Middle Class Tax Relief and
Jobs Creation Act of 2012, established provisions for FERS Revised
Annuity Employees (FERS-RAE). The law permanently increases the
retirement contributions by 2.30 percent of pay for these employees.
Separate normal cost rates will apply for FERS-RAE.
The Governmentwide normal cost percentages, including the employee
contributions, are as follows:
Normal Cost Percentages for FERS and FERS-Revised Annuity Employee (RAE)
Groups
------------------------------------------------------------------------
FERS normal FERS-RAE
Group cost normal cost
(percent) (percent)
------------------------------------------------------------------------
Members................................. 21.5 14.2
Congressional employees, except members 19.7 14.2
of the Capitol Police..................
Congressional employees who are members 19.7 19.7
of the Capitol Police..................
Law enforcement officers, members of the 30.1 30.1
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................. 32.4 32.5
Military reserve technicians............ 17.7 18.1
Employees under section 303 of the 19.7 19.9
Central Intelligence Agency Retirement
Act of 1964 for certain employees (when
serving abroad)........................
All other regular FERS employees........ 14.0 14.2
------------------------------------------------------------------------
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, 2014.
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.
[[Page 29225]]
U.S. Office of Personnel Management.
Katherine Archuleta,
Director.
[FR Doc. 2014-11771 Filed 5-20-14; 8:45 am]
BILLING CODE 6325-38-P
