[Federal Register Volume 69, Number 167 (Monday, August 30, 2004)]
[Notices]
[Pages 52944-52946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19638]


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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 adopted by the Board of Actuaries of the Civil Service 
Retirement System.

DATES: The revised present value factors apply to survivor reductions 
or

[[Page 52945]]

employee annuities that commence on or after October 1, 2004.

ADDRESSES: Send requests for actuarial assumptions and data to the 
Actuaries Group, Room 4307, Office of Personnel Management, 1900 E 
Street, NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Patrick Jennings, (202) 606-0299.

SUPPLEMENTARY INFORMATION: On September 24, 2003, OPM published a 
notice in the Federal Register at 68 FR 55296 to revise the normal cost 
percentage under the Federal Employees' Retirement System (FERS) Act of 
1986, Public Law 99-335, 100 Stat. 514, based on changed economic 
assumptions and demographic factors adopted by the Board of Actuaries 
of the Civil Service Retirement System. Under 5 U.S.C. 8461(i), those 
changed economic assumptions (principally the change in expected 
investment return from 6.75 percent to 6.25 percent) require 
corresponding changes in the present value factors used to produce 
actuarially equivalent benefits when required by the FERS Act.
    Several provisions of 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 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 5 
CFR 842.706(a).
    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 5 U.S.C. 8416(b), (c), or 8417(b). 
Under section 11004 of the Omnibus Budget Reconciliation Act of 1993, 
Public Law 103-66, 107 Stat. 312, 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, 110 Stat. 186.
    OPM published the present value factors currently in effect on May 
9, 2002, at 67 FR 31708. The revised factors will become effective in 
October 2004 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, 2004. See 5 CFR 
842.706. For survivor election deposits, the new factors will apply to 
survivor reductions that commence on or after October 1, 2004. 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 5 CFR 847.603, is on or 
after October 1, 2004. 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 5 U.S.C.
8416(b), 8416(c), 8417(b), or 8420a, or under section 1043 of Public Law
                                104-106]
------------------------------------------------------------------------
                                                                 Present
                              Age                                 value
                                                                 factor
------------------------------------------------------------------------
62............................................................     167.5
63............................................................     163.0
64............................................................     158.5
65............................................................     154.0
66............................................................     149.4
67............................................................     145.1
68............................................................     140.5
69............................................................     135.9
70............................................................     131.5
71............................................................     127.0
72............................................................     122.4
73............................................................     118.0
74............................................................     113.6
75............................................................     109.0
76............................................................     104.1
77............................................................      99.5
78............................................................      94.9
79............................................................      90.1
80............................................................      85.7
81............................................................      81.1
82............................................................      76.2
83............................................................      71.8
84............................................................      67.8
85............................................................      64.2
86............................................................      60.6
87............................................................      56.7
88............................................................      52.9
89............................................................      49.7
90............................................................      46.4
------------------------------------------------------------------------


     Table II.A.--FERS Present Value Factors for Ages 40 Through 61
 [Applicable to annuity payable when annuity is not increased by cost of
  living adjustments before age 62 following an election under 5 U.S.C.
8416(b), 8416(c), 8417(b), or 8420a, or under section 1043 of Public Law
                                104-106]
------------------------------------------------------------------------
                                                                 Present
                              Age                                 value
                                                                 factor
------------------------------------------------------------------------
40............................................................     185.6
41............................................................     185.3
42............................................................     185.2
43............................................................     184.9
44............................................................     184.1
45............................................................     182.8
46............................................................     181.6
47............................................................     180.7
48............................................................     179.5
49............................................................     177.9
50............................................................     176.4
51............................................................     175.4
52............................................................     174.7
53............................................................     174.1
54............................................................     173.3
55............................................................     172.5
56............................................................     171.8
57............................................................     171.2
58............................................................     170.7
59............................................................     170.5
60............................................................     170.5
61............................................................     170.1
------------------------------------------------------------------------


[[Page 52946]]


     Table II.B.--FERS Present Value Factors for Ages 40 Through 61
   [Applicable to annuity payable when annuity is increased by cost of
  living adjustments before age 62 following an election under 5 U.S.C.
  8416(b), 8416 (c), 8417(b), or 8420a, or under section 1043 of Public
                              Law 104-106]
------------------------------------------------------------------------
                                                                 Present
                              Age                                 value
                                                                 factor
------------------------------------------------------------------------
40............................................................     249.1
41............................................................     245.8
42............................................................     242.5
43............................................................     239.0
44............................................................     235.4
45............................................................     231.8
46............................................................     227.9
47............................................................     223.9
48............................................................     219.8
49............................................................     215.5
50............................................................     211.7
51............................................................     208.3
52............................................................     204.7
53............................................................     201.1
54............................................................     197.3
55............................................................     193.5
56............................................................     189.5
57............................................................     185.4
58............................................................     181.2
59............................................................     176.9
60............................................................     172.6
61............................................................     168.2
------------------------------------------------------------------------


 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
                      Age at calculation                          of a
                                                                 monthly
                                                                 annuity
------------------------------------------------------------------------
17............................................................     293.2
18............................................................     291.6
19............................................................     289.9
20............................................................     288.1
21............................................................     286.2
22............................................................     284.3
23............................................................     282.4
24............................................................     280.3
25............................................................     278.2
26............................................................     276.0
27............................................................     273.8
28............................................................     271.4
29............................................................     269.6
30............................................................     268.8
31............................................................     267.8
32............................................................     266.0
33............................................................     264.0
34............................................................     262.1
35............................................................     260.0
36............................................................     257.8
37............................................................     255.7
38............................................................     253.4
39............................................................     251.0
------------------------------------------------------------------------


Kay Coles James,
Director.
[FR Doc. 04-19638 Filed 8-27-04; 8:45 am]
BILLING CODE 6325-38-P