[Federal Register Volume 69, Number 167 (Monday, August 30, 2004)]
[Notices]
[Pages 52943-52944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19639]


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OFFICE OF PERSONNEL MANAGEMENT


Civil Service 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, owe certain redeposits based on refunds of contributions for 
service before October 1, 1990, 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.

EFFECTIVE DATES: The revised present value factors apply to survivor 
reductions or employee annuities that commence on or after October 1, 
2004.

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

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

SUPPLEMENTARY INFORMATION: On September 24, 2003, OPM published (68 FR 
55296) a notice in the Federal Register 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 factors adopted by the Board of Actuaries of the Civil 
Service Retirement System (CSRS). Those changed economic assumptions 
(principally the change in expected investment return from 6.75 percent 
to 6.25 percent) require corresponding changes in factors used to 
produce actuarially equivalent benefits when required by the CSRS Act.
    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 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 
section 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 October 1, 1990, under section 
8334(d)(2) of title 5, United States Code.

[[Page 52944]]

    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 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 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 
(67 FR 31708) on May 9, 2002. The revised factors will become effective 
in October 2004 to correspond with the changes in FERS 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, 2004. 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, 2004. 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 Federal Regulations, 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:

  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
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                                                                 Present
                              Age                                 value
                                                                 factor
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40............................................................     277.6
41............................................................     274.7
42............................................................     272.1
43............................................................     269.1
44............................................................     265.0
45............................................................     260.0
46............................................................     255.1
47............................................................     250.8
48............................................................     245.9
49............................................................     240.3
50............................................................     234.8
51............................................................     230.2
52............................................................     225.9
53............................................................     221.4
54............................................................     216.8
55............................................................     211.9
56............................................................     207.2
57............................................................     202.3
58............................................................     197.6
59............................................................     193.1
60............................................................     188.7
61............................................................     183.7
62............................................................     178.3
63............................................................     173.2
64............................................................     168.2
65............................................................     163.0
66............................................................     157.9
67............................................................     153.1
68............................................................     148.0
69............................................................     142.8
70............................................................     138.0
71............................................................     133.1
72............................................................     128.0
73............................................................     123.1
74............................................................     118.4
75............................................................     113.5
76............................................................     108.2
77............................................................     103.2
78............................................................      98.2
79............................................................      93.1
80............................................................      88.4
81............................................................      83.6
82............................................................      78.4
83............................................................      73.7
84............................................................      69.5
85............................................................      65.8
86............................................................      62.0
87............................................................      57.9
88............................................................      54.0
89............................................................      50.7
90............................................................      47.2
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  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)
------------------------------------------------------------------------
                                                                 Present
                                                                  value
                      Age at calculation                          of a
                                                                 monthly
                                                                 annuity
------------------------------------------------------------------------
17............................................................     334.7
18............................................................     332.5
19............................................................     330.1
20............................................................     327.7
21............................................................     325.2
22............................................................     322.6
23............................................................     320.0
24............................................................     317.3
25............................................................     314.5
26............................................................     311.6
27............................................................     308.7
28............................................................     305.6
29............................................................     303.2
30............................................................     301.9
31............................................................     300.5
32............................................................     298.0
33............................................................     295.3
34............................................................     292.8
35............................................................     290.0
36............................................................     287.1
37............................................................     284.3
38............................................................     281.3
39............................................................     278.3
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Office of Personnel Management.
Kay Coles James,
Director.
[FR Doc. 04-19639 Filed 8-27-04; 8:45 am]
BILLING CODE 6325-38-P