[Federal Register Volume 62, Number 75 (Friday, April 18, 1997)]
[Notices]
[Pages 19151-19152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10079]
[[Page 19151]]
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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 a 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 approved by the Board of Actuaries of the Civil Service
Retirement System.
EFFECTIVE DATE: Revised present value factors will apply to survivor
reductions or employee annuities that commence on or after October 1,
1997.
ADDRESSES: Send requests for actuarial assumptions and data to the
Office of the Actuary, Room 4307 STOP, Office of Personnel Management,
Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT:
Harold L. Siegelman, (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, we are 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 we will publish a
notice in the Federal Register whenever we change 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 currently used to compute the reduction were published by OPM
(59 FR 35534) on July 12, 1994.
Section 842.615 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 or divorce under section 8416(b) or (c) or section
8417(b) 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 8420a of title 5, United States Code. The present
value factors currently used to compute the reduction were published by
OPM (59 FR 12143) on March 16, 1994.
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 used to compute the deficiency were published by OPM (61 FR
41718) on August 9, 1996.
Today, OPM is publishing a notice in the Federal Register to revise
the normal cost percentage under the FERS Act of 1986, Public Law 99-
335, based on changed economic assumptions and demographic factors
approved by the Board of Actuaries of the Civil Service Retirement
System. Under section 8461(i) of title 5, United States Code, those
changed economic assumptions require corresponding changes in the
present value factors. The revised factors will become effective in
October 1997 to correspond with the changes in FERS normal cost
percentages. For alternative forms of annuity, the new factors will
apply to annuities that commerce on or after October 1, 1997. See 5 CFR
842.706. For survivor election deposits, the new factors will apply to
survivor reductions that commerce on or after October 1, 1997. 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 Sec. 847.603 of Title 5,
Code of Federal Regulations, is on or after October 1, 1997. 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 Ages 62 and Older
[Applicable to Annuity Payable Following an Election under Section 8416
(b) or (c) or Section 8417(b) or Section 8420a of Title 5, United States
Code, or under Section 1043 of Public Law 104-106]
------------------------------------------------------------------------
Present
Age value
factor
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62........................................................... 160.0
63........................................................... 155.6
64........................................................... 151.3
65........................................................... 147.0
66........................................................... 142.7
67........................................................... 138.4
68........................................................... 134.0
69........................................................... 129.5
70........................................................... 125.0
71........................................................... 120.4
72........................................................... 115.7
73........................................................... 111.1
74........................................................... 106.4
75........................................................... 101.7
76........................................................... 97.1
77........................................................... 92.6
78........................................................... 88.1
79........................................................... 83.8
80........................................................... 79.5
81........................................................... 75.4
82........................................................... 71.4
83........................................................... 67.6
84........................................................... 64.0
85........................................................... 60.4
86........................................................... 57.1
87........................................................... 53.9
88........................................................... 50.9
89........................................................... 48.0
90........................................................... 45.2
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Table II.A.--FERS Present Value Factors Ages 40 Through 61
[Applicable to Annuity Payable Following an Election under Section 8416
(b) or (c) or Section 8417 (b) or Section 8420a of Title 5, United
States Code, or under Section 1043 of Public Law 104-106 when Annuity is
not increased by COLA'S before Age 62]
------------------------------------------------------------------------
Present
Age value
factor
------------------------------------------------------------------------
40........................................................... 167.4
41........................................................... 166.7
42........................................................... 166.2
43........................................................... 166.0
44........................................................... 165.9
45........................................................... 165.5
46........................................................... 165.1
47........................................................... 164.8
48........................................................... 164.6
49........................................................... 164.1
50........................................................... 163.5
51........................................................... 163.4
52........................................................... 163.3
53........................................................... 163.2
54........................................................... 162.9
55........................................................... 162.5
[[Page 19152]]
56........................................................... 162.6
57........................................................... 162.8
58........................................................... 162.9
59........................................................... 163.5
60........................................................... 164.5
61........................................................... 165.2
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Table II.B.--FERS Present Value Factors Ages 40 Through 61
[Applicable to annuity payable following an election under section 8416
(b) or (c) or section 8417(b) or section 8420a of title 5, United States
Code, or under section 1043 of Public Law 104-106 when annuity is
increased by COLA's before age 62]
------------------------------------------------------------------------
Present
Age value
factor
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40........................................................... 236.4
41........................................................... 233.0
42........................................................... 230.0
43........................................................... 227.4
44........................................................... 224.7
45........................................................... 221.9
46........................................................... 219.0
47........................................................... 216.1
48........................................................... 213.1
49........................................................... 210.0
50........................................................... 206.8
51........................................................... 203.5
52........................................................... 200.1
53........................................................... 196.5
54........................................................... 192.8
55........................................................... 188.9
56........................................................... 185.0
57........................................................... 181.0
58........................................................... 176.9
59........................................................... 172.7
60........................................................... 168.5
61........................................................... 164.3
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Table III.--FERS Present Value Factors for Ages at Calculation Below 40
[Applicable to an Annual Payable Following an Election under Section
1043 of Public Law 104-106]
------------------------------------------------------------------------
Present
value of
Age at calculation a monthly
annuity
------------------------------------------------------------------------
17........................................................... 287.3
18........................................................... 285.7
19........................................................... 284.1
20........................................................... 282.4
21........................................................... 280.7
22........................................................... 278.9
23........................................................... 277.1
24........................................................... 275.2
25........................................................... 273.3
26........................................................... 271.3
27........................................................... 269.2
28........................................................... 267.1
29........................................................... 264.9
30........................................................... 262.7
31........................................................... 260.4
32........................................................... 258.0
33........................................................... 255.6
34........................................................... 253.0
35........................................................... 250.5
36........................................................... 247.8
37........................................................... 245.1
38........................................................... 242.3
39........................................................... 239.5
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U.S. Office of Personnel Management.
James B. King,
Director.
[FR Doc. 97-10079 Filed 4-17-97; 8:45 am]
BILLING CODE 6325-01-M
