[Federal Register Volume 69, Number 230 (Wednesday, December 1, 2004)]
[Rules and Regulations]
[Pages 69805-69807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26440]



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 Rules and Regulations
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  Federal Register / Vol. 69, No. 230 / Wednesday, December 1, 2004 / 
Rules and Regulations  

[[Page 69805]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 841, 842, and 843

RIN 3206-AK57


Federal Employees' Retirement System; Death Benefits and Employee 
Refunds

AGENCY: Office of Personnel Management.

ACTION: Interim rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing an interim 
rule to revise the table of reduction factors for early commencing 
dates of survivor annuities for spouses of separated employees who die 
before the date on which they would be eligible for unreduced deferred 
annuities, and to revise the annuity factor for spouses of deceased 
employees who die in service when those spouses elect to receive the 
basic employee death benefit in 36 installments under the Federal 
Employees' Retirement System (FERS) Act of 1986. These rules are 
necessary to conform the tables to the previously published economic 
assumptions adopted by the Board of Actuaries.

DATES: This interim rule is effective October 1, 2004. We must receive 
your comments by January 3, 2005.

ADDRESSES: You may submit comments, identified by RIN number 3206-AK57, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include RIN number 3206-AK57 in 
the subject line of the message.
     Mail: Mary Ellen Wilson, Chief, Retirement Group, Office 
of Personnel Management, 1900 E Street NW., Washington, DC 20415-3200.

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. 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 
FERS Act.
    Section 843.309 of title 5, Code of Federal Regulations, regulates 
the payment of the basic employee death benefit. Under 5 U.S.C. 
8442(b), the basic employee death benefit may be paid as a lump sum or 
as an equivalent benefit in 36 installments. These rules amend 5 CFR 
843.309(b)(2) to conform the factor used to convert the lump sum to 36-
installment payments with the revised economic assumptions.
    Section 843.311 of title 5, Code of Federal Regulations, regulates 
the benefits for the survivors of separated employees under 5 U.S.C. 
8442(c). This section provides a choice of benefits for eligible 
current and former spouses. If the current or former spouse is the 
person entitled to the unexpended balance under the order of precedence 
under 5 U.S.C. 8424, he or she may elect to receive the unexpended 
balance instead of an annuity. Alternatively, an eligible current or 
former spouse may elect to receive an annuity commencing on the day 
after the employee's death or on the deceased separated employee's 62nd 
birthday. If the annuity commences on the deceased separated employee's 
62nd birthday, it equals 50 percent of the annuity that the separated 
employee would have received when he or she attained age 62. If the 
current or former spouse elects the earlier commencing date, the 
annuity is reduced using the factors in Appendix A to subpart C of part 
843 to make the annuity actuarially equivalent to the annuity that he 
or she would have received if it commenced on the retiree's 62nd 
birthday. These rules amend that appendix to conform with the revised 
economic assumptions.
    We are removing the table of normal cost percentages in Appendix A 
to subpart D of part 841 because it has no regulatory effect. Updated 
normal cost rates are published by OPM through a notice in the Federal 
Register. The table in Appendix A merely provides information about the 
historic rates that have already been published through Federal 
Register notices and is no longer required in the regulation.
    We are removing the table of the National Average Wage Index in 
Appendix B to subpart C of part 843, and we are amending 5 CFR 842.504 
and 843.308 to delete references to Appendix B. Since the Social 
Security Administration publishes a notice of the National Average Wage 
Index annually in the Federal Register, we are removing this 
information from the regulations. The National Average Wage Index is 
used in 5 CFR 842.504, to determine supplementary benefits payable to a 
retiree, and in 5 CFR 843.308, to determine supplementary benefits 
payable on the death of a retiree. Since Appendix B is removed, we are 
amending sections 842.504 and 843.308 to refer to the National Average 
Wage Index.

Waiver of General Notice of Proposed Rulemaking

    Under section 553(b)(3)(B) and (d)(3) of title 5, United States 
Code, I find that good reason exists for waiving the general notice of 
proposed rulemaking and for making these amendments effective in less 
than 30 days. The amendments made by this rule are required by changes 
in economic assumptions that have already been published. Providing a 
comment period on the result of mathematical computations resulting 
from the changed economic assumptions is unnecessary, and to the extent 
that it would delay benefit payments is contrary to the public 
interest.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because the regulation 
will only affect retirement payments to retired

[[Page 69806]]

employees, spouses, and former spouses.

List of Subjects in 5 CFR Parts 841, 842 and 843

    Administrative practice and procedure, Air traffic controllers, 
Alimony, Claims, Disability benefits, Firefighters, Government 
employees, Income taxes, Intergovernmental relations, Law enforcement 
officers, Pensions, Retirement.

Kay Coles James,
Director.

0
For the reasons stated in the preamble, the Office of Personnel 
Management amends 5 CFR parts 841, 842 and 843 as follows:

PART 841--FEDERAL EMPLOYEES RETIREMENT SYSTEM--GENERAL 
ADMINISTRATION

0
1. The authority citation for part 841 continues to read as follows:

    Authority: 5 U.S.C. 8461; Sec. 841.108 also issued under 5 
U.S.C. 552a; subpart D also issued under 5 U.S.C. 8423; Sec. 841.504 
also issued under 5 U.S.C. 8422; Sec. 841.507 also issued under 
section 505 of Pub. L. 99-335; subpart J also issued under 5 U.S.C. 
8469; Sec. 841.506 also issued under 5 U.S.C. 7701(b)(2); Sec. 
841.508 also issued under section 505 of Pub. L. 99-335; Sec. 
841.604 also issued under Title II, Pub. L. 106-265, 114 Stat. 780.

Subpart D--Government Costs

0
2. Remove Appendix A to subpart D of part 841.

PART 842--FEDERAL EMPLOYEES RETIREMENT SYSTEM--BASIC ANNUITY

0
3. The authority citation for part 842 is revised to read as follows:

    Authority: 5 U.S.C. 8461(g); Secs. 842.104 and 842.106 also 
issued under 5 U.S.C. 8461(n); Sec. 842.104 also issued under 
sections 3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.105 
also issued under 5 U.S.C. 8402(c)(1) and 7701(b)(2); Sec. 842.106 
also issued under section 102(e) of Pub. L. 104-8, 109 Stat. 102, as 
amended by section 153 of Pub. L. 104-134, 110 Stat. 1321-102; Sec. 
842.107 also issued under sections 11202(f), 11232(e), and 11246(b) 
of Pub. L. 105-33, 111 Stat. 251, and section 7(b) of Pub. L. 105-
274, 112 Stat. 2419; Sec. 842.108 also issued under section 7(e) of 
Pub. L. 105-274, 112 Stat. 2419; Sec. 842.213 also issued under 5 
U.S.C. 8414(b)(1)(B) and section 1313(b)(5) of Pub. L. 107-296, 116 
Stat. 2135; Secs. 842.604 and 842.611 also issued under 5 U.S.C. 
8417; Sec. 842.607 also issued under 5 U.S.C. 8416 and 8417; Sec. 
842.614 also issued under 5 U.S.C. 8419; Sec. 842.615 also issued 
under 5 U.S.C. 8418; Sec. 842.703 also issued under section 
7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388; Sec. 842.707 also 
issued under section 6001 of Pub. L. 100-203, 101 Stat. 1300; Sec. 
842.708 also issued under section 4005 of Pub. L. 101-239, 103 Stat. 
2106 and section 7001 of Pub. L. 101-508, 104 Stat. 1388; subpart H 
also issued under 5 U.S.C. 1104; Sec. 842.810 also issued under 
section 636 of Appendix C to Pub. L. 106-554 at 114 Stat. 2763A-164.

Subpart E--Annuity Supplement

0
4. In Sec.  842.504, revise paragraph (b)(2)(iv)(A) and paragraph 
(b)(2)(iv)(B)(2) to read as follows:


Sec.  842.504  Amount of annuity supplement.

* * * * *
    (b) * * *
    (2) * * *
    (iv) * * *
    (A) The National Average Wage Index (as determined by the 
Commissioner of the Social Security Administration) corresponding to 
that year, multiplied by
    (B) * * *
    (2) The denominator of which is the National Average Wage Index (as 
determined by the Commissioner of the Social Security Administration) 
corresponding to the retiree's first full year of service creditable 
under FERS.

PART 843--FEDERAL EMPLOYEES RETIREMENT SYSTEM--DEATH BENEFITS AND 
EMPLOYEE REFUNDS

0
5. The authority citation for part 843 continues to read as follows:

    Authority: 5 U.S.C. 8461; Sec. Sec.  843.205, 843.208, and 
843.209 also issued under 5 U.S.C. 8424; Sec.  843.309 also issued 
under 5 U.S.C. 8442; Sec.  843.406 also issued under 5 U.S.C. 8441.

Subpart C--Current and Former Spouse Benefits

0
6. In Sec. 843.308, revise paragraph (b)(2)(iii)(B) to read as 
follows:Sec. 843.308 Supplementary benefits on death of a retiree.
* * * * *
    (b) * * *
    (2) * * *
    (iii) * * *
    (B) For each year after age 21 for which the retiree did not work 
under FERS, the retiree's wages are deemed to equal the National 
Average Wage Index (as determined by the Commissioner of the Social 
Security Administration) corresponding to that year, multiplied by the 
retiree's basic pay for his or her first full year of employment under 
FERS, divided by the National Average Wage Index corresponding to the 
retiree's first full year of employment under FERS.
* * * * *

0
7. In Sec. 843.309, revise paragraph (b)(2) to read as follows:


Sec.  843.309  Basic employee death benefit.

* * * * *
    (b) * * *
    (2) For deaths occurring on or after October 1, 2004, 36 equal 
monthly installments of 3.03771 percent of the amount of the basic 
employee death benefit.
* * * * *

0
8. Revise Appendix A to subpart C of part 843 to read as follows:

Appendix A to Subpart C of Part 843--Present Value Conversion Factors 
for Earlier Commencing Date of Annuities of Current and Former Spouses 
of Deceased Separated Employees

    With at least 10, but less than 20 years of creditable service--

------------------------------------------------------------------------
     Age of separated employee at birthday before death       Multiplier
------------------------------------------------------------------------
26.........................................................       0.0600
27.........................................................        .0640
28.........................................................        .0696
29.........................................................        .0738
30.........................................................        .0810
31.........................................................        .0865
32.........................................................        .0925
33.........................................................        .0995
34.........................................................        .1067
35.........................................................        .1155
36.........................................................        .1238
37.........................................................        .1334
38.........................................................        .1426
39.........................................................        .1551
40.........................................................        .1667
41.........................................................        .1800
42.........................................................        .1940
43.........................................................        .2097
44.........................................................        .2260
45.........................................................        .2437
46.........................................................        .2634
47.........................................................        .2855
48.........................................................        .3082
49.........................................................        .3343
50.........................................................        .3615
51.........................................................        .3922
52.........................................................        .4251
53.........................................................        .4616
54.........................................................        .5018
55.........................................................        .5455
56.........................................................        .5936
57.........................................................        .6452
58.........................................................        .7033
59.........................................................        .7669
60.........................................................        .8369
61.........................................................        .9144
------------------------------------------------------------------------

    With at least 20, but less than 30 years of creditable service--

------------------------------------------------------------------------
     Age of separated employee at birthday before death       Multiplier
------------------------------------------------------------------------
36.........................................................       0.1489
37.........................................................        .1601
38.........................................................        .1714
39.........................................................        .1858
40.........................................................        .2001

[[Page 69807]]

 
41.........................................................        .2161
42.........................................................        .2328
43.........................................................        .2516
44.........................................................        .2709
45.........................................................        .2922
46.........................................................        .3159
47.........................................................        .3423
48.........................................................        .3695
49.........................................................        .4005
50.........................................................        .4332
51.........................................................        .4698
52.........................................................        .5090
53.........................................................        .5527
54.........................................................        .6005
55.........................................................        .6526
56.........................................................        .7098
57.........................................................        .7717
58.........................................................        .8407
59.........................................................        .9165
------------------------------------------------------------------------

    With at least 30 years of creditable service--

----------------------------------------------------------------------------------------------------------------
                                                                    Multiplier by separated employee's year of
                                                                                       birth
       Age of separated employee at birthday before death        -----------------------------------------------
                                                                                     From 1950
                                                                    After 1966     through 1966     Before 1950
----------------------------------------------------------------------------------------------------------------
46..............................................................          0.4110          0.4477          0.4872
47..............................................................           .4449           .4844           .5270
48..............................................................           .4805           .5231           .5691
49..............................................................           .5204           .5666           .6162
50..............................................................           .5630           .6130           .6667
51..............................................................           .6101           .6641           .7221
52..............................................................           .6609           .7194           .7822
53..............................................................           .7172           .7805           .8486
54..............................................................           .7787           .8472           .9209
55..............................................................           .8458           .9202          1.0000
56..............................................................           .9194          1.0000          1.0000
----------------------------------------------------------------------------------------------------------------


0
9. Remove Appendix B to subpart C of part 843.

[FR Doc. 04-26440 Filed 11-30-04; 8:45 am]
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