Federal Employees’ Retirement System; Government Costs
Final rule.
CFR Part: "5 CFR Parts 831, 839, 841, 842, and 847"
RIN Number: "RIN 3206-AN22"
Citation: "82 FR 49277"
Page Number: "49277"
"Rules and Regulations"
SUMMARY:
DATES: This rule is effective
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION: OPM's determination of the FERS normal cost percentage necessary to fund the
OPM's final rule amends its definition of "actuary" provided under 5 CFR 841.402. The prior definition was limited to "an associate or fellow in the
OPM's final rule amends its regulations under 5 CFR 841.403 to make clear that it determines separate normal cost percentages for employees covered under Federal Employees Retirement System (FERS), FERS Revised Annuity Employees (FERS-RAE), and FERS Further Revised Annuity Employees (FERS-FRAE) in compliance with section 5001 of the "Middle Class Tax Relief and Job Creation Act of 2012," Public Law 112-96, 126 Stat. 199 (
OPM's final rule amends 5 CFR 841.403 to make clear that it will include members of the
OPM's final rule amends 5 CFR 841.403 to include
OPM's final rule also adds 5 CFR 841.415 through 841.417 to the regulations. These sections establish the procedures and requirements for filing a request for reconsideration of a supplemental liability determination filed by the Secretary of the
Additionally, OPM's final rule refines the definitions of present value factor and actuarial present value under 5 CFR parts 831, 839, 842, and 847 to ensure that these definitions are uniform and appropriate. OPM's final rule clarifies, under 5 CFR 831.303, 831.603, 831.2202, 839.102, 842.602, 842.702, and 847.103, that the present value factors are computed by using a composite of sex-distinct factors based upon mortality assumptions for annuitant populations. The factors reflect an increase in benefit payments at an assumed rate of cost-of living adjustment, where appropriate. OPM removed 5 CFR 847.602, which provided a separate description of present value factors for purposes of subpart F of part 847 in order to include a definition of "present value factor" for all of part 847, and OPM added 5 CFR 842.616 to describe when the present value factors will be published. OPM's final rule clarifies under 5 CFR 842.602 and 842.702 that separate present value factors apply to FERS annuities that receive cost-of-living adjustments before the retiree attains age 62 versus annuities that do not receive cost-of-living adjustments before age 62.
Comments
OPM received comments on its proposed rule from the
OPM has determined that this change is unnecessary. Currently, the regulations under 5 CFR 841.405 provide that the normal cost percentages will be based on the economic assumptions determined by the Board, and OPM's final rule amends 5 CFR 841.414 to provide that each supplemental liability will be computed based on the economic assumptions determined by the
OPM disagrees with the
The
Finally, the
Executive Order 12866, Regulatory Review
This rule has been reviewed by the
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic impact on a substantial number of small entities.
Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated
List of Subjects
5 CFR Part 831
Firefighters, Government employees, Income taxes, Intergovernmental relations, Law enforcement officers, Pensions, Reporting and recordkeeping requirements, Retirement.
5 CFR Part 839
Administrative practice and procedure, Claims, Employment taxes, Government employees, Pensions, Reporting and recordkeeping requirements, Retirement,
5 CFR Part 841
Administrative practice and procedure, Air traffic controllers, Claims, Disability benefits, Firefighters, Government employees, Income taxes, Intergovernmental relations, Law enforcement officers, Pensions, Retirement.
5 CFR Part 842
Air traffic controllers, Alimony, Firefighters, Law enforcement officers, Pensions, Retirement.
5 CFR Part 847
Administrative practice and procedure, Disability benefits, Government employees, Pensions, Reporting and recordkeeping requirements, Retirement.
Acting Director.
For the reasons stated in the preamble, the
PART 831--RETIREMENT
1. The authority citation for part 831 continues to read as follows:
Authority: 5 U.S.C. 8347; Sec. 831.102 also issued under 5 U.S.C. 8334; Sec. 831.106 also issued under 5 U.S.C. 552a; Sec. 831.108 also issued under 5 U.S.C. 8336(d)(2); Sec. 831.114 also issued under 5 U.S.C. 8336(d)(2), and Sec. 1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Sec. 831.201(b)(1) also issued under 5 U.S.C. 8347(g); Sec. 831.201(b)(6) also issued under 5 U.S.C. 7701(b)(2); Sec. 831.201(g) also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251; Sec. 831.201(g) also issued under Sec. 7(b) and (e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.201(i) also issued under Secs. 3 and 7(c) of Pub. L. 105-274, 112 Stat. 2419; Sec. 831.204 also issued under Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by Sec. 153 of Pub. L. 104-134, 110 Stat. 1321; Sec. 831.205 also issued under Sec. 2207 of Pub. L. 106-265, 114 Stat. 784; Sec. 831.206 also issued under Sec. 1622(b) of Pub. L. 104-106, 110 Stat. 515; Sec. 831.301 also issued under Sec. 2203 of Pub. L. 106-265, 114 Stat. 780; Sec. 831.303 also issued under 5 U.S.C. 8334(d)(2) and Sec. 2203 of Pub. L. 106-235, 114 Stat. 780; Sec. 831.502 also issued under 5 U.S.C. 8337, and Sec. 1(3), E.O. 11228, 3 CFR 1965-1965 Comp. p. 317; Sec. 831.663 also issued under 5 U.S.C. 8339(j) and (k)(2); Secs. 831.663 and 831.664 also issued under Sec. 11004(c)(2) of Pub. L. 103-66, 107 Stat. 412; Sec. 831.682 also issued under Sec. 201(d) of Pub. L. 99-251, 100 Stat. 23; Sec. 831.912 also issued under Sec. 636 of Appendix C to Pub. L. 106-554, 114 Stat. 2763A-164; Subpart P also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Subpart V also issued under 5 U.S.C. 8343a and Sec. 6001 of Pub. L. 100-203, 101 Stat. 1330-275; Sec. 831.2203 also issued under Sec. 7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388-328.
Subpart A--Administration and General Provisions
2. Add
(a) OPM will compute each supplemental liability of the Fund using demographic factors specific to the populations for which the supplemental liability applies.
(b) The supplemental liability will be computed based on the economic assumptions used by the
(c) Each supplemental liability shall be rounded to the nearest one hundred million dollars.
Subpart C--Credit for Service
3. Amend
* * * * *
(c) * * *
(3) For the purpose of paragraph (b)(2) of this section, the term "present value factor" has the same meaning as defined in
(d) * * *
(3) For the purpose of paragraph (d)(2) of this section, the term "present value factor" has the same meaning as defined in
Subpart F--Survivor Annuities
4. Amend
* * * * *
Present value factor means the amount of money (earning interest at an assumed rate) required at the time of annuity commencement to fund an annuity that starts at the rate of
* * * * *
Subpart V--Alternative Forms of Annuities
5. Amend
* * * * *
Present value factor has the same meaning in this subpart as defined in
* * * * *
PART 839--CORRECTION OF RETIREMENT COVERAGE ERRORS UNDER THE FEDERAL ERRONEOUS RETIREMENT COVERAGE CORRECTIONS ACT
6. The authority citation for part 839 continues to read as follows:
Authority: Title II, Pub. L. 106-265, 114 Stat. 770.
Subpart A--General Provisions
7. Amend
* * * * *
Present value factor has the same meaning in this subpart as defined in
* * * * *
PART 841--FEDERAL EMPLOYEES RETIREMENT SYSTEM--GENERAL ADMINSTRATION
8. 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; Secs. 841.110 and 841.111 also issued under 5 U.S.C. 8470(a); 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
9. Amend
* * * * *
(b) * * *
(3) Agency appeals of rate determinations;
(4) Methodology for determining the amount due from each agency; and
(5) Requests for reconsideration of the supplemental liability.
10. Amend
* * * * *
Actuary means a professional who meets the qualification standards to issue a statement of actuarial opinion in regard to defined benefit retirement plans in
* * * * *
11. Amend
Separate normal cost percentages for FERS, FERS-RAE and FERS-FRAE will be determined for each of the following groups of employees:
* * * * *
(b) Congressional employees, including members of the
* * * * *
(g) Other employees of the
(h) All other employees.
12. Revise
(a) OPM will determine the normal cost percentages for each category of employees. These normal cost percentages will be used by all agencies that have not been granted a single agency rate under
* * * * *
13. Revise
* * * * *
(b) * * *
(1) The normal cost percentages and any single agency rates for each category of employees;
* * * * *
14. Revise
(a) An agency with at least 1,000 employees in the general category of employees or 500 employees in any of the special categories may appeal to the Board the normal cost percentage for that category as applied to that agency.
(b) No appeal will be considered by the Board unless the agency files, no later than 6 months after the date of publication of the notice of normal cost percentages under
15. Amend
* * * * *
(c) The actuarial report must contain a detailed actuarial analysis of the normal cost of FERS benefits as applied to the employees of that agency in the category of employees for which the agency is appealing. The actuarial report must--
* * * * *
(3) Specifically address and consider each of the demographic factors listed in
* * * * *
16. Amend
(a) The normal cost percentages as published under
(b) While an agency has an appeal pending, the published normal cost percentage continues to apply to that agency.
* * * * *
(d) * * *
(3) When all relevant factors are considered together, there is a demonstrated difference between the published normal cost percentage being appealed and the normal cost percentage for the group at issue; and
(4) The difference is at least 10 percent of the published normal cost percentage being appealed.
17. Revise
* * * * *
(c) A single agency rate may be higher or lower than the published normal cost percentage and will remain in force for not less than 3 years.
* * * * *
18. Add
(a) OPM will compute each supplemental liability of the
(b) The supplemental liability will be computed based on the economic assumptions determined by the
(c) Each supplemental liability will be rounded to the nearest one hundred million dollars.
19. Add
(a) The Secretary of the
(b) No request for reconsideration will be considered by the Board unless the Secretary of the
20. Add
(a) To request reconsideration of the amount payable with respect to the supplemental liability, the Secretary of the
(1) A signed letter of appeal summarizing the basis of the request; and
(2) An actuarial report that contains a detailed actuarial analysis of the request.
(b) The actuarial report must--
(1) Be signed by an actuary;
(2) Specifically present any data and development of assumptions related to the request for reconsideration;
(3) Use each of the demographic factors listed in
(4) Use the economic assumptions under
21. Add
(a) The Board cannot sustain a request for reconsideration unless the Board finds that--
(1) The data used in the actuarial report required by
(2) The assumptions used in the actuarial report required by
(3) The difference in the supplemental liability amount is at least 2 percent of the present value of future benefits calculated in OPM's computation of the supplemental liability.
(b) If the Board sustains a request for reconsideration of the supplemental liability, OPM will recompute the supplemental liability according to the economic and demographic assumptions recommended by the Board.
PART 842--FEDERAL EMPLOYEES RETIREMENT SYSTEM--BASIC ANNUITY
22. The authority citation for part 842 continues 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 Secs. 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 Sec. 102(e) of Pub. L. 104-8, 109 Stat. 102, as amended by Sec. 153 of Pub. L. 104-134, 110 Stat. 1321-102; Sec. 842.107 also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L. 105-33, 111 Stat. 251, and Sec. 7(b) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.108 also issued under Sec. 7(e) of Pub. L. 105-274, 112 Stat. 2419; Sec. 842.109 also issued under Sec. 1622(b) of Public Law 104-106, 110 Stat. 515; Sec. 842.208 also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042; Sec. 842.213 also issued under 5 U.S.C. 8414(b)(1)(B) and Sec. 1313(b)(5) of Pub. L. 107-296, 116 Stat. 2135; Secs. 842.304 and 842.305 also issued under Sec. 321(f) of Pub. L. 107-228, 116 Stat. 1383, 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 Sec. 7001(a)(4) of Pub. L. 101-508, 104 Stat. 1388; Sec. 842.707 also issued under Sec. 6001 of Pub. L. 100-203, 101 Stat. 1300; Sec. 842.708 also issued under Sec. 4005 of Pub. L. 101-239, 103 Stat. 2106 and Sec. 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 Sec. 636 of Appendix C to Pub. L. 106-554 at 114 Stat. 2763A-164; Sec. 842.811 also issued under Sec. 226(c)(2) of Public Law 108-176, 117 Stat. 2529; Subpart J also issued under Sec. 535(d) of Title V of Division E of Pub. L. 110-161, 121 Stat. 2042.
Subpart F--Survivor Elections
23. Amend
* * * * *
Present value factor means the amount of money (earning interest at an assumed rate) required at the time of annuity commencement to fund an annuity that starts at the rate of
* * * * *
24. Add
When OPM publishes in the
Subpart G--Alternative Forms of Annuities
25. Amend
* * * * *
Present value factor has the same meaning in this subpart as defined in
* * * * *
PART 847--ELECTIONS OF RETIREMENT COVERAGE BY CURRENT AND FORMER EMPLOYEES OF NONAPPROPRIATED FUND INSTRUMENTALITIES
26. The authority citation for part 847 continues to read as follows:
Authority: 5 U.S.C. 8332(b)(17) and 8411(b)(6) and sections 1131 and 1132 of Pub. L. 107-107,
Subpart A--General Provisions
27. Amend
* * * * *
(b) * * *
Actuarial present value means the amount of monthly annuity at time of retirement multiplied by the applicable present value factor.
* * *
Present value factor has the same meaning in this part as defined in
* * * * *
Subpart F--Additional Employee Costs Under the Retroactive Provisions
28. Remove and reserve
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