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Federal Employees' Retirement System; Present Value Conversion Factors for Spouses of Deceased Separated Employees

July 18, 2014



Proposed rule.

CFR Part: "5 CFR Part 843"

RIN Number: "RIN 3206-AM99"

Citation: "79 FR 41928"

Page Number: "41928"

"Proposed Rules"

SUMMARY: The Office of Personnel Management (OPM) is issuing a proposed rule to revise the table of reduction factors for early commencing dates of survivor annuities for spouses of separated employees who die before the date on which they would be eligible for unreduced deferred annuities, and to revise the annuity factor for spouses of deceased employees who die in service when those spouses elect to receive the basic employee death benefit in 36 installments under the Federal Employees' Retirement System (FERS) Act of 1986. These rules are necessary to ensure that the tables conform to the economic and demographic assumptions adopted by the Board of Actuaries and published in the Federal Register on May 21, 2014, as required by 5 U.S.C. 8461(i).

   EFFECTIVE DATE: We must receive your comments by September 16, 2014.

   ADDRESSES: You may submit comments, identified by docket number and/or RIN number 3206-AM99, by any of the following methods:

    * Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

    * Email: combox@opm.gov. Include RIN number 3206-AM99 in the subject line of the message.

    * Mail: Jim Giuseppe, Retirement Policy, Retirement Services, Office of Personnel Management, 1900 E. Street NW., Washington, DC 20415-3200.

   FOR FURTHER INFORMATION CONTACT: Roxann Johnson, (202) 606-0299.

   SUPPLEMENTARY INFORMATION: On May 21, 2014, OPM published a notice in the Federal Register to revise the normal cost percentages under the Federal Employees' Retirement System (FERS) Act of 1986, Public Law 99-335, 100 Stat. 514, as amended, based on economic assumptions and demographic factors adopted by the Board of Actuaries of the Civil Service Retirement System. 79 Fed. Reg. 29,224 (May 21, 2014). By statute under 5 U.S.C. 8461(i), the demographic factors and economic assumptions require corresponding changes in factors used to produce actuarially equivalent benefits when required by the FERS Act.

   Section 843.309 of title 5, Code of Federal Regulations, regulates the payment of the basic employee death benefit. Under 5 U.S.C. 8442(b), the basic employee death benefit may be paid as a lump sum or as an equivalent benefit in 36 installments. These rules amend 5 CFR 843.309(b)(2) to conform the factor used to convert the lump sum to 36-installment payments with the revised economic assumptions.

   Section 843.311 of title 5, Code of Federal Regulations, regulates the benefits for the survivors of separated employees under 5 U.S.C. 8442(c). This section provides a choice of benefits for eligible current and former spouses. If the current or former spouse is the person entitled to the unexpended balance under the order of precedence under 5 U.S.C. 8424, he or she may elect to receive the unexpended balance instead of an annuity.

   Alternatively, an eligible current or former spouse may elect to receive an annuity commencing on the day after the employee's death or on the deceased separated employee's 62nd birthday. If the annuity commences on the deceased separated employee's 62nd birthday, the annuity will equal 50 percent of the annuity that the separated employee would have received had he or she attained age 62. If the current or former spouse elects the earlier commencing date, the annuity is reduced using the factors in Appendix A to subpart C of part 843 to make the annuity actuarially equivalent to the present value of the annuity that the spouse or former spouse would have received if the annuity had commenced on the retiree's 62nd birthday. These rules amend that appendix to conform to the revised economic assumptions.

Executive Order 12866, Regulatory Review

   This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order (E.O.) 12866, as amended by E.O. 13258 and E.O. 13422.

Regulatory Flexibility Act

   I certify that this regulation will not have a significant economic impact on a substantial number of small entities because the regulation will only affect retirement payments to surviving current and former spouses of former employees and Members who separated from Federal service with title to a deferred annuity.

List of Subjects in 5 CFR Part 843

   Air traffic controllers, Disability benefits, Firefighters, Government employees, Law enforcement officers, Pensions, Retirement.

U.S. Office of Personnel Management.

Katherine Archuleta,

Director.

   For the reasons stated in the preamble, the Office of Personnel Management proposes to amend 5 CFR part 843 as follows:

PART 843--FEDERAL EMPLOYEES RETIREMENT SYSTEM--DEATH BENEFITS AND EMPLOYEE REFUNDS

   1. The authority citation for part 843 continues to read as follows:

   Authority: 5 U.S.C. 8461; SUBSEC 843.205, 843.208, and 843.209 also issued under 5 U.S.C. 8424; SEC 843.309 also issued under 5 U.S.C. 8442; SEC 843.406 also issued under 5 U.S.C. 8441.

Subpart C--Current and Former Spouse Benefits

   2. In SEC 843.309, revise paragraph (b)(2) to read as follows:

SEC 843.309 Basic employee death benefit.

* * * * *

   (b) * * *

   (2) For deaths occurring on or after October 1, 2014, 36 equal monthly installments of 2.99522 percent of the amount of the basic employee death benefit.

* * * * *

   3. Revise Appendix A to subpart C of part 843 to read as follows:

Appendix A to Subpart C of Part 843--Present Value Conversion Factors for Earlier Comencing Date of Annuities of Current and Former Spouses of Deceased Separated Employees

   With at least 10 but less than 20 years of creditable service-- GOES

Age of separated employee at birthday before death Multiplier 26 .0638 27 .0700 28 .0764 29 .0831 30 .0902 31 .0978 32 .1058 33 .1142 34 .1233 35 .1331 36 .1435 37 .1547 38 .1667 39 .1794 40 .1931 41 .2079 42 .2236 43 .2406 44 .2588 45 .2784 46 .2993 47 .3218 48 .3463 49 .3725 50 .4008 51 .4313 52 .4644 53 .5001 54 .5387 55 .5806 56 .6262 57 .6756 58 .7295 59 .7882 60 .8525 61 .9228



   With at least 20, but less than 30 years of creditable service-- GOES

Age of separated employee at birthday before death Multiplier 36 .1693 37 .1825 38 .1966 39 .2116 40 .2276 41 .2449 42 .2634 43 .2833 44 .3047 45 .3276 46 .3523 47 .3787 48 .4073 49 .4380 50 .4712 51 .5070 52 .5457 53 .5875 54 .6327 55 .6818 56 .7351 57 .7930 58 .8560 59 .9248



   With at least 30 years of creditable service-- GOES

Multiplier by separated employee's year of birth Age of separated employee at birthday After 1966 From 1950 before death through 1966 46 .4457 .4811 47 .4790 .5170 48 .5151 .5559 49 .5538 .5976 50 .5955 .6426 51 .6405 .6911 52 .6892 .7435 53 .7417 .8001 54 .7986 .8614 55 .8603 .9279 56 .9272 1.0000



[FR Doc. 2014-16949 Filed 7-17-14; 8:45 am]

BILLING CODE 6325-38-P


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Source: Federal Register


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