[Federal Register Volume 62, Number 75 (Friday, April 18, 1997)]
[Notices]
[Pages 19151-19152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10079]



[[Page 19151]]

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OFFICE OF PERSONNEL MANAGEMENT


Federal Employees Retirement System; Present Value Factors

AGENCY: Office of Personnel Management.

ACTION: Notice.

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SUMMARY: 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 a 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 economic assumptions and demographic 
factors approved by the Board of Actuaries of the Civil Service 
Retirement System.

EFFECTIVE DATE: Revised present value factors will apply to survivor 
reductions or employee annuities that commence on or after October 1, 
1997.

ADDRESSES: Send requests for actuarial assumptions and data to the 
Office of the Actuary, Room 4307 STOP, Office of Personnel Management, 
Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT:
Harold L. Siegelman, (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, we are 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 we will publish a 
notice in the Federal Register whenever we change 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 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 currently used to compute the reduction were published by OPM 
(59 FR 35534) on July 12, 1994.
    Section 842.615 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 or divorce under section 8416(b) or (c) or section 
8417(b) 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 by 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 8420a of title 5, United States Code. The present 
value factors currently used to compute the reduction were published by 
OPM (59 FR 12143) on March 16, 1994.
    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 used to compute the deficiency were published by OPM (61 FR 
41718) on August 9, 1996.
    Today, OPM is publishing a notice in the Federal Register to revise 
the normal cost percentage under the FERS Act of 1986, Public Law 99-
335, based on changed economic assumptions and demographic factors 
approved by the Board of Actuaries of the Civil Service Retirement 
System. Under section 8461(i) of title 5, United States Code, those 
changed economic assumptions require corresponding changes in the 
present value factors. The revised factors will become effective in 
October 1997 to correspond with the changes in FERS normal cost 
percentages. For alternative forms of annuity, the new factors will 
apply to annuities that commerce on or after October 1, 1997. See 5 CFR 
842.706. For survivor election deposits, the new factors will apply to 
survivor reductions that commerce on or after October 1, 1997. See 5 
CFR 842.615(b). For obtaining credit for service with certain 
nonappropriated fund instrumentalities, the new factors will apply to 
cases in which the date of computation under Sec. 847.603 of Title 5, 
Code of Federal Regulations, is on or after October 1, 1997. See 5 CFR 
847.602(c) and 847.603.
    OPM is, therefore, revising the tables of present value factors to 
read as follows:

         Table I.--FERS Present Value Factors Ages 62 and Older         
 [Applicable to Annuity Payable Following an Election under Section 8416
(b) or (c) or Section 8417(b) or Section 8420a of Title 5, United States
           Code, or under Section 1043 of Public Law 104-106]           
------------------------------------------------------------------------
                                                                Present 
                             Age                                 value  
                                                                 factor 
------------------------------------------------------------------------
62...........................................................      160.0
63...........................................................      155.6
64...........................................................      151.3
65...........................................................      147.0
66...........................................................      142.7
67...........................................................      138.4
68...........................................................      134.0
69...........................................................      129.5
70...........................................................      125.0
71...........................................................      120.4
72...........................................................      115.7
73...........................................................      111.1
74...........................................................      106.4
75...........................................................      101.7
76...........................................................       97.1
77...........................................................       92.6
78...........................................................       88.1
79...........................................................       83.8
80...........................................................       79.5
81...........................................................       75.4
82...........................................................       71.4
83...........................................................       67.6
84...........................................................       64.0
85...........................................................       60.4
86...........................................................       57.1
87...........................................................       53.9
88...........................................................       50.9
89...........................................................       48.0
90...........................................................       45.2
------------------------------------------------------------------------


       Table II.A.--FERS Present Value Factors Ages 40 Through 61       
 [Applicable to Annuity Payable Following an Election under Section 8416
   (b) or (c) or Section 8417 (b) or Section 8420a of Title 5, United   
States Code, or under Section 1043 of Public Law 104-106 when Annuity is
                 not increased by COLA'S before Age 62]                 
------------------------------------------------------------------------
                                                                Present 
                             Age                                 value  
                                                                 factor 
------------------------------------------------------------------------
40...........................................................      167.4
41...........................................................      166.7
42...........................................................      166.2
43...........................................................      166.0
44...........................................................      165.9
45...........................................................      165.5
46...........................................................      165.1
47...........................................................      164.8
48...........................................................      164.6
49...........................................................      164.1
50...........................................................      163.5
51...........................................................      163.4
52...........................................................      163.3
53...........................................................      163.2
54...........................................................      162.9
55...........................................................      162.5

[[Page 19152]]

                                                                        
56...........................................................      162.6
57...........................................................      162.8
58...........................................................      162.9
59...........................................................      163.5
60...........................................................      164.5
61...........................................................      165.2
------------------------------------------------------------------------


       Table II.B.--FERS Present Value Factors Ages 40 Through 61       
 [Applicable to annuity payable following an election under section 8416
(b) or (c) or section 8417(b) or section 8420a of title 5, United States
    Code, or under section 1043 of Public Law 104-106 when annuity is   
                   increased by COLA's before age 62]                   
------------------------------------------------------------------------
                                                                Present 
                             Age                                 value  
                                                                 factor 
------------------------------------------------------------------------
40...........................................................      236.4
41...........................................................      233.0
42...........................................................      230.0
43...........................................................      227.4
44...........................................................      224.7
45...........................................................      221.9
46...........................................................      219.0
47...........................................................      216.1
48...........................................................      213.1
49...........................................................      210.0
50...........................................................      206.8
51...........................................................      203.5
52...........................................................      200.1
53...........................................................      196.5
54...........................................................      192.8
55...........................................................      188.9
56...........................................................      185.0
57...........................................................      181.0
58...........................................................      176.9
59...........................................................      172.7
60...........................................................      168.5
61...........................................................      164.3
------------------------------------------------------------------------


 Table III.--FERS Present Value Factors for Ages at Calculation Below 40
  [Applicable to an Annual Payable Following an Election under Section  
                       1043 of Public Law 104-106]                      
------------------------------------------------------------------------
                                                                Present 
                                                                value of
                      Age at calculation                       a monthly
                                                                annuity 
------------------------------------------------------------------------
17...........................................................      287.3
18...........................................................      285.7
19...........................................................      284.1
20...........................................................      282.4
21...........................................................      280.7
22...........................................................      278.9
23...........................................................      277.1
24...........................................................      275.2
25...........................................................      273.3
26...........................................................      271.3
27...........................................................      269.2
28...........................................................      267.1
29...........................................................      264.9
30...........................................................      262.7
31...........................................................      260.4
32...........................................................      258.0
33...........................................................      255.6
34...........................................................      253.0
35...........................................................      250.5
36...........................................................      247.8
37...........................................................      245.1
38...........................................................      242.3
39...........................................................      239.5
------------------------------------------------------------------------

    U.S. Office of Personnel Management.
James B. King,
Director.
[FR Doc. 97-10079 Filed 4-17-97; 8:45 am]
BILLING CODE 6325-01-M