[Federal Register: August 30, 2004 (Volume 69, Number 167)]
[Notices]
[Page 52944-52946]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30au04-105]
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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
[[Page 52945]]
employee annuities that commence on or after October 1, 2004.
ADDRESSES: Send requests for actuarial assumptions and data to the
Actuaries Group, Room 4307, Office of Personnel Management, 1900 E
Street, NW., Washington, DC 20415.
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. Under 5 U.S.C. 8461(i), those
changed economic assumptions (principally the change in expected
investment return from 6.75 percent to 6.25 percent) require
corresponding changes in the present value factors used to produce
actuarially equivalent benefits when required by the FERS Act.
Several provisions of 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), (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 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.
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, 110 Stat. 186.
OPM published the present value factors currently in effect on May
9, 2002, at 67 FR 31708. The revised factors will become effective in
October 2004 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, 2004. See 5 CFR
842.706. For survivor election deposits, the new factors will apply to
survivor reductions that commence on or after October 1, 2004. 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, 2004. 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 Public Law
104-106]
------------------------------------------------------------------------
Present
Age value
factor
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62............................................................ 167.5
63............................................................ 163.0
64............................................................ 158.5
65............................................................ 154.0
66............................................................ 149.4
67............................................................ 145.1
68............................................................ 140.5
69............................................................ 135.9
70............................................................ 131.5
71............................................................ 127.0
72............................................................ 122.4
73............................................................ 118.0
74............................................................ 113.6
75............................................................ 109.0
76............................................................ 104.1
77............................................................ 99.5
78............................................................ 94.9
79............................................................ 90.1
80............................................................ 85.7
81............................................................ 81.1
82............................................................ 76.2
83............................................................ 71.8
84............................................................ 67.8
85............................................................ 64.2
86............................................................ 60.6
87............................................................ 56.7
88............................................................ 52.9
89............................................................ 49.7
90............................................................ 46.4
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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 Public Law
104-106]
------------------------------------------------------------------------
Present
Age value
factor
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40............................................................ 185.6
41............................................................ 185.3
42............................................................ 185.2
43............................................................ 184.9
44............................................................ 184.1
45............................................................ 182.8
46............................................................ 181.6
47............................................................ 180.7
48............................................................ 179.5
49............................................................ 177.9
50............................................................ 176.4
51............................................................ 175.4
52............................................................ 174.7
53............................................................ 174.1
54............................................................ 173.3
55............................................................ 172.5
56............................................................ 171.8
57............................................................ 171.2
58............................................................ 170.7
59............................................................ 170.5
60............................................................ 170.5
61............................................................ 170.1
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[[Page 52946]]
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 Public
Law 104-106]
------------------------------------------------------------------------
Present
Age value
factor
------------------------------------------------------------------------
40............................................................ 249.1
41............................................................ 245.8
42............................................................ 242.5
43............................................................ 239.0
44............................................................ 235.4
45............................................................ 231.8
46............................................................ 227.9
47............................................................ 223.9
48............................................................ 219.8
49............................................................ 215.5
50............................................................ 211.7
51............................................................ 208.3
52............................................................ 204.7
53............................................................ 201.1
54............................................................ 197.3
55............................................................ 193.5
56............................................................ 189.5
57............................................................ 185.4
58............................................................ 181.2
59............................................................ 176.9
60............................................................ 172.6
61............................................................ 168.2
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Table III.--FERS Present Value Factors for Ages at Calculation Below 40
[Applicable to annuity payable following an election under section 1043
of Public Law 104-106]
------------------------------------------------------------------------
Present
value
Age at calculation of a
monthly
annuity
------------------------------------------------------------------------
17............................................................ 293.2
18............................................................ 291.6
19............................................................ 289.9
20............................................................ 288.1
21............................................................ 286.2
22............................................................ 284.3
23............................................................ 282.4
24............................................................ 280.3
25............................................................ 278.2
26............................................................ 276.0
27............................................................ 273.8
28............................................................ 271.4
29............................................................ 269.6
30............................................................ 268.8
31............................................................ 267.8
32............................................................ 266.0
33............................................................ 264.0
34............................................................ 262.1
35............................................................ 260.0
36............................................................ 257.8
37............................................................ 255.7
38............................................................ 253.4
39............................................................ 251.0
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Kay Coles James,
Director.
[FR Doc. 04-19638 Filed 8-27-04; 8:45 am]
BILLING CODE 6325-38-P