[Federal Register Volume 67, Number 90 (Thursday, May 9, 2002)]
[Notices]
[Pages 31706-31707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11570]



[[Page 31705]]

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Part V





Office of Personnel Management





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Federal Employees Retirement System and Civil Service Retirement 
System; Present Value Factors and Normal Cost Percentages; Notices

  Federal Register / Vol. 67, No. 90 / Thursday, May 9, 2002 / 
Notices  

[[Page 31706]]


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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 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: The revised present value factors apply to survivor 
reductions or employee annuities that commence on or after October 1, 
2002.

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: Patrick Jennings, (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 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 listed below are used to compute the annuity reduction under 
section 842.706(a) of Title 5, Code of Federal Regulations.
    Section 842.615 of Title 5, Code of Federal Regulations, prescribes 
the use of these 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.
    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 
(62 FR 19151) on April 18, 1997. 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 2002 to correspond with the changes in 
FERS normal cost percentages. For alternative forms of annuity, the new 
factors will apply to annuities that commence on or after October 1, 
2002. See 5 CFR 842.706. For survivor election deposits, the new 
factors will apply to survivor reductions that commence on or after 
October 1, 2002. 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 section 
847.603 of Title 5, Code of Federal Regulations, is on or after October 
1, 2002. 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 for 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........................................................         165.6
63........................................................         161.3
64........................................................         156.9
65........................................................         152.3
66........................................................         148.0
67........................................................         143.8
68........................................................         139.5
69........................................................         135.2
70........................................................         130.8
71........................................................         126.5
72........................................................         122.1
73........................................................         117.5
74........................................................         112.9
75........................................................         108.1
76........................................................         103.4
77........................................................          98.4
78........................................................          94.1
79........................................................          90.0
80........................................................          85.4
81........................................................          80.6
82........................................................          75.9
83........................................................          71.6
84........................................................          67.4
85........................................................          62.9
86........................................................          58.7
87........................................................          55.7
88........................................................          53.3
89........................................................          50.8
90........................................................          47.7
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     Table II.A.--FERS Present Value Factors for 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........................................................         176.8
41........................................................         176.3
42........................................................         175.9
43........................................................         175.4
44........................................................         174.6
45........................................................         173.5
46........................................................         172.5
47........................................................         171.8
48........................................................         171.0
49........................................................         169.8
50........................................................         168.6
51........................................................         168.2
52........................................................         168.0
53........................................................         167.8
54........................................................         167.3
55........................................................         167.0
56........................................................         166.7
57........................................................         166.6

[[Page 31707]]

 
58........................................................         166.7
59........................................................         166.8
60........................................................         167.3
61........................................................         167.7
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     Table II.B.--FERS Present Value Factors for 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........................................................         245.5
41........................................................         242.4
42........................................................         239.2
43........................................................         235.8
44........................................................         232.3
45........................................................         228.7
46........................................................         224.9
47........................................................         221.1
48........................................................         217.1
49........................................................         212.9
50........................................................         209.1
51........................................................         205.8
52........................................................         202.4
53........................................................         198.8
54........................................................         195.1
55........................................................         191.3
56........................................................         187.4
57........................................................         183.4
58........................................................         179.3
59........................................................         175.1
60........................................................         170.9
61........................................................         166.6
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 Table III.--FERS Present Value Factors for Ages at Calculation Below 40
 [Applicable to annuity payable following an election under Section 1043
                         of Public Law 104-106]
------------------------------------------------------------------------
                                                               Present
                                                             value of a
                    Age at calculation                         monthly
                                                               annuity
------------------------------------------------------------------------
17........................................................         287.9
18........................................................         286.4
19........................................................         284.8
20........................................................         283.0
21........................................................         281.2
22........................................................         279.4
23........................................................         277.6
24........................................................         275.6
25........................................................         273.5
26........................................................         271.4
27........................................................         269.2
28........................................................         266.9
29........................................................         265.1
30........................................................         264.4
31........................................................         263.6
32........................................................         261.8
33........................................................         259.9
34........................................................         258.1
35........................................................         256.1
36........................................................         254.0
37........................................................         251.9
38........................................................         249.7
39........................................................         247.3
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Office of Personnel Management.
Kay Coles James,
Director.
[FR Doc. 02-11570 Filed 5-8-02; 8:45 am]
BILLING CODE 6325-50-P