[Federal Register Volume 72, Number 109 (Thursday, June 7, 2007)]
[Notices]
[Pages 31629-31631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-11083]


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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 employee annuities that commence on or after October 1, 2007.

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

FOR FURTHER INFORMATION CONTACT: Jessica Johnson, (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, 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), 8416(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 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

[[Page 31630]]

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 
August 30, 2004, at 69 FR 52944. Elsewhere in today's Federal Register, 
OPM published a notice 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 require corresponding changes in the present value 
factors used to produce actuarially equivalent benefits when required 
by the FERS Act. The revised factors will become effective in October 
2007 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, 2007. See 5 CFR 842.706. 
For survivor election deposits, the new factors will apply to survivor 
reductions that commence on or after October 1, 2007. 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, 2007. 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 Pub. L.
                                104-106]
------------------------------------------------------------------------
                                                                 Present
                              Age                                 value
                                                                 factor
------------------------------------------------------------------------
62............................................................     174.9
63............................................................     170.0
64............................................................     165.0
65............................................................     159.9
66............................................................     154.9
67............................................................     150.0
68............................................................     145.0
69............................................................     139.9
70............................................................     134.8
71............................................................     129.7
72............................................................     124.4
73............................................................     119.3
74............................................................     114.3
75............................................................     109.2
76............................................................     104.3
77............................................................      99.7
78............................................................      94.7
79............................................................      89.6
80............................................................      84.8
81............................................................      79.7
82............................................................      74.4
83............................................................      69.9
84............................................................      66.0
85............................................................      61.9
86............................................................      57.5
87............................................................      53.5
88............................................................      50.2
89............................................................      47.0
90............................................................      42.9
------------------------------------------------------------------------


     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 Pub. L.
                                104-106]
------------------------------------------------------------------------
                                                                 Present
                              Age                                 value
                                                                 factor
------------------------------------------------------------------------
40............................................................     185.2
41............................................................     184.9
42............................................................     184.8
43............................................................     184.7
44............................................................     184.5
45............................................................     184.2
46............................................................     183.8
47............................................................     183.4
48............................................................     183.0
49............................................................     182.3
50............................................................     181.5
51............................................................     181.2
52............................................................     180.9
53............................................................     180.5
54............................................................     179.9
55............................................................     179.3
56............................................................     178.8
57............................................................     178.4
58............................................................     178.1
59............................................................     177.9
60............................................................     177.9
61............................................................     177.7
------------------------------------------------------------------------


     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 Pub. L.
                                104-106]
------------------------------------------------------------------------
                                                                 Present
                              Age                                 value
                                                                 factor
------------------------------------------------------------------------
40............................................................     252.8
41............................................................     250.4
42............................................................     247.8
43............................................................     245.1
44............................................................     242.3
45............................................................     239.5
46............................................................     236.5
47............................................................     233.4
48............................................................     230.2
49............................................................     226.9
50............................................................     223.4
51............................................................     219.8
52............................................................     216.1
53............................................................     212.2
54............................................................     208.2
55............................................................     204.1
56............................................................     199.8
57............................................................     195.4
58............................................................     190.9
59............................................................     186.3
60............................................................     181.6
61............................................................     176.8
------------------------------------------------------------------------


 Table III.--FERS Present Value Factors for Ages at Calculation Below 40
 [Applicable to annuity payable following an election under section 1043
                           of Pub. L. 104-106]
------------------------------------------------------------------------
                                                                 Present
                                                                  value
                      Age at calculation                          of a
                                                                 monthly
                                                                 annuity
------------------------------------------------------------------------
17............................................................     291.0
18............................................................     290.0
19............................................................     288.9
20............................................................     287.8
21............................................................     286.6
22............................................................     285.4
23............................................................     284.1
24............................................................     282.8
25............................................................     281.4
26............................................................     280.0
27............................................................     278.5
28............................................................     277.0
29............................................................     275.4
30............................................................     273.7
31............................................................     272.0
32............................................................     270.3
33............................................................     268.4
34............................................................     266.5
35............................................................     264.5
36............................................................     262.5
37............................................................     260.4
38............................................................     258.2
39............................................................     255.9
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[[Page 31631]]

Office of Personnel Management.
Linda M. Springer,
 Director.
 [FR Doc. E7-11083 Filed 6-6-07; 8:45 am]
BILLING CODE 6325-38-P