[Federal Register Volume 88, Number 72 (Friday, April 14, 2023)]
[Notices]
[Pages 23108-23109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07876]
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OFFICE OF PERSONNEL MANAGEMENT
Federal Employees' Retirement System; Normal Cost Percentages
AGENCY: Office of Personnel Management.
ACTION: Notice.
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SUMMARY: The Office of Personnel Management (OPM) is providing notice
of revised normal cost percentages for employees covered by the Federal
Employees' Retirement System (FERS) Act of 1986.
DATES: The revised normal cost percentages are effective at the
beginning of the first pay period commencing on or after October 1,
2023. Agency appeals of the normal cost percentages must be filed no
later than October 16, 2023.
ADDRESSES: Send or deliver agency appeals of the normal cost
percentages and requests for actuarial assumptions and data to the
Board of Actuaries, care of Gregory Kissel, Senior Actuary, Office of
Healthcare and Insurance, Office of Personnel Management, Room 4316,
1900 E Street NW, Washington, DC 20415, or by email to [email protected].
FOR FURTHER INFORMATION CONTACT: Karla Yeakle, (202) 606-0299.
SUPPLEMENTARY INFORMATION: The FERS Act of 1986, Public Law 99-335,
created a new retirement system intended to cover most Federal
employees hired after 1983. Most Federal employees hired before 1984
are under the older Civil Service Retirement System (CSRS). Section
8423 of title 5, United States Code, as added by the FERS Act of 1986,
provides for the payment of the Government's share of the cost of the
retirement system under FERS. Employees' contributions are established
by law and constitute only a portion of the cost of funding the
retirement system; employing agencies are required to pay the remaining
costs. The amount of funding required, known as ``normal cost,'' is the
entry age normal cost of the provisions of FERS that relate to the
Civil Service Retirement and Disability Fund (Fund). The normal cost
must be computed by OPM in accordance with generally accepted actuarial
practices and standards (using dynamic assumptions). The normal cost
calculations depend on economic and demographic assumptions. Subpart D
of part 841 of title 5, Code of Federal Regulations, regulates how
normal costs are determined.
In its meeting on May 10, 2022, the Board of Actuaries of the Civil
Service Retirement System (the Board) recommended revisions to the
demographic assumptions used in the actuarial valuations of CSRS and
FERS. The demographic assumptions include assumed rates of future
mortality, employee withdrawal, retirement, and merit and longevity pay
increases. The Board reviewed the long-term economic assumptions and
determined that they should remain unchanged. OPM has adopted the
Board's recommendations.
[[Page 23109]]
With regard to the economic assumptions described under section
841.402 of title 5, Code of Federal Regulations, used in the actuarial
valuations of FERS, the Board concluded that the long-term economic
assumptions should remain unchanged from what was determined at the
Board's meeting on April 2, 2020. The long-term economic assumptions
continue to be a rate of investment return of 4.0 percent; assumed
inflation rate of 2.40 percent; the assumed rate of FERS annuitant Cost
of Living Adjustments should remain at 80 percent of the assumed rate
of inflation; and the projected rate of General Schedule salary
increases should remain at 2.65 percent. The general salary increases
are in addition to assumed merit salary increases. These assumptions
are intended to reflect the long term expected future experience of the
Systems.
The demographic assumptions are determined separately for each of a
number of special groups, in cases where separate experience data is
available. Based on the demographic and economic assumptions described
above, OPM has determined the normal cost percentage for each category
of employees under section 841.403 of title 5, Code of Federal
Regulations.
Section 5001 of Public Law 112-96, The Middle Class Tax Relief and
Jobs Creation Act of 2012, established provisions for FERS Revised
Annuity Employees (FERS-RAE). The law permanently increases the
retirement contributions by 2.30 percent of pay for these employees.
Subsequently, Section 401 of Public Law 113-67, the Bipartisan Budget
Act of 2013, created another class of FERS coverage, FERS-Further
Revised Annuity Employee (FERS-FRAE). Employees subject to FERS-FRAE
must pay an increase of 1.30 percent of pay above the retirement
contribution percentage set for FERS-RAE. Separate normal cost
percentages apply for employees covered under FERS-RAE and for
employees covered under FERS-FRAE.
The normal cost percentages for each category of employee,
including the employee contributions, are as follows:
Normal Cost Percentages for FERS, FERS--Revised Annuity Employee (RAE), and FERS--Further Revised Annuity (FRAE)
Groups
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FERS-FRAE
Group FERS normal FERS-RAE normal cost
cost (percent) normal cost (percent)
-------------------------------------------------------------------------------------(percent)------------------
Members......................................................... 26.3 19.6 19.9
Capitol Police covered under 5 U.S.C. 8412(d) and 5 U.S.C. 39.5 40.0 40.2
8425(c)........................................................
Other Congressional employees................................... 27.0 19.6 19.9
Law enforcement officers, members of the Supreme Court Police, 39.5 40.0 40.2
firefighters, nuclear materials couriers, customs and border
protection officers, and employees under section 302 of the
Central Intelligence Agency Retirement Act of 1964 for certain
employees......................................................
Air traffic controllers......................................... 40.4 40.9 41.2
Military reserve technicians.................................... 21.4 21.8 22.1
Employees under section 303 of the Central Intelligence Agency 27.0 27.5 27.8
Retirement Act of 1964 for certain employees (when serving
abroad)........................................................
Other employees of the United States Postal Service............. 16.9 17.3 17.6
All other regular FERS employees................................ 19.2 19.6 19.9
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Under section 841.408 of title 5, Code of Federal Regulations,
these normal cost percentages are effective at the beginning of the
first pay period commencing on or after October 1, 2023.
The time limit and address for filing agency appeals under sections
841.409 through 841.412 of title 5, Code of Federal Regulations, are
stated in the DATES and ADDRESSES sections of this notice.
Office of Personnel Management.
Stephen Hickman,
Federal Register Liaison.
[FR Doc. 2023-07876 Filed 4-13-23; 8:45 am]
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