81 FR 93851 - Federal Employees' Retirement System; Government Costs

OFFICE OF PERSONNEL MANAGEMENT

Federal Register Volume 81, Issue 246 (December 22, 2016)

This rule proposes to amend its regulations to clarify the manner for determining a supplemental liability, the process by which the United States Postal Service (USPS) and the United States Department of the Treasury (Treasury) may request reconsideration of OPM's valuation of the supplemental liability, and to make associated changes. OPM also proposes to amends its regulations to clarify the employee categories it will use to compute the normal cost percentages.

[Federal Register Volume 81, Number 246 (Thursday, December 22, 2016)]
[Proposed Rules]
[Pages 93851-93855]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30487]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 81, No. 246 / Thursday, December 22, 2016 / 
Proposed Rules

[[Page 93851]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 831, 839, 841, 842, and 847

RIN 3206-AN22


Federal Employees' Retirement System; Government Costs

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule proposes to amend its regulations to clarify the 
manner for determining a supplemental liability, the process by which 
the United States Postal Service (USPS) and the United States 
Department of the Treasury (Treasury) may request reconsideration of 
OPM's valuation of the supplemental liability, and to make associated 
changes. OPM also proposes to amends its regulations to clarify the 
employee categories it will use to compute the normal cost percentages.

DATES: We must receive your comments by February 21, 2017.

ADDRESSES: You may submit comments, identified by docket number and/or 
RIN number 3206-AN22 by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include RIN number 3206-AN22 in the 
subject line of the message.
     Mail: Roxann Johnson, 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: OPM's determination of the Federal 
Employees' Retirement System (FERS) normal cost percentage necessary to 
fund the Civil Service Retirement and Disability Fund (CSRDF) is 
subject to appeal by agencies with at least 1,000 employees in the 
general category of employees or 500 employees in any of the special 
category of employees, and the Secretary of the Treasury or the 
Postmaster General may request the Board of Actuaries reconsider the 
amount determined to be payable with respect to any supplemental 
liability in accordance with 5 U.S.C.8423(c) and 5 CFR 841.409. 
Sections 841.401 through 841.411 establish the time limits and 
requirements for an agency appeal of OPM's determination of a normal 
cost percentage. However, these regulations do not include detailed 
requirements for the contents of a USPS or a Treasury request for 
reconsideration of the amount payable with respect to a supplemental 
liability. Therefore, OPM proposes to include new regulations under 5 
CFR part 841 that clarify the process by which the Secretary of the 
Treasury and the U.S. Postmaster General may file a request for the 
Board of Actuaries of the Civil Service Retirement System to reconsider 
an amount determined to be payable to the CSRDF with respect to a 
supplemental liability.
    OPM also proposes to amend its definition of ``actuary'' in 5 CFR 
841.402. The current definition is limited to ``an associate or fellow 
in the Society of Actuaries and one who is enrolled under section 3042 
of Public Law 93-406, the Employee Retirement Income Security Act of 
1974'' (ERISA). OPM believes this definition no longer reflects 
professional standards generally required of an actuary for this 
subpart, and that the current regulatory definition is overly narrow 
because it works to exclude knowledgeable and experienced actuaries who 
may not be enrolled under ERISA, but who are well qualified to issue 
statements of opinion with regard to the CSRDF. As a result, OPM 
proposes to amend the definition of ``actuary'' under 5 CFR 841.402 to 
include those who are qualified under actuarial standards of practice 
in the United States and who have the experience and knowledge to issue 
a statement of opinion with regard to defined benefit retirement plans.
    Additionally, OPM proposes to amend its regulations under 5 CFR 
841.403 to make clear that it determines separate normal cost 
percentages for employees covered under 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 (Feb. 
22, 2012), and section 401 of the ``Bipartisan Budget Act of 2013,'' 
Public Law 113-67, 127 Stat. 1165 (Dec. 26, 2013). This legislation 
defined FERS-RAE and FERS-FRAE employees for whom increased retirement 
deductions apply, which results in increased outlays from the CSRDF in 
refund and lump-sum payments of employee contributions. For that 
reason, the normal cost percentages for FERS-RAE and FERS-FRAE 
employees are expected to exceed the normal cost percentages for other 
FERS employees. The legislation also reduced the benefit accrual rates 
for Members and Congressional employees (other than Capitol Police) 
subject to FERS-RAE and FERS-FRAE, resulting in lower associated normal 
cost percentages. To ensure regulations reflect current statutory 
language, OPM proposes to amend 5 CFR 841.403 to clearly establish 
separate normal cost percentages for FERS, FERS-RAE and FERS-FRAE 
employees within each employee category listed under 5 CFR 841.403.
    Also under 5 CFR 841.403, OPM proposes to clarify that it will 
include members of the Capitol Police as ``Congressional Employees'' 
for purposes of deriving separate normal cost percentages for this 
employee group. OPM includes members of the Capitol Police with 
Congressional employees when deriving the normal cost percentages for 
this employee group because, in part, 5 U.S.C. 2107(4), defines ``a 
member or employee of the Capitol Police'' as ``a Congressional 
employee.'' The Middle Class Tax Relief and Job Creation Act of 2014 
eliminated for FERS-RAE and FERS-FRAE employees the higher annuity 
accrual rates for Congressional employees provided under 5 U.S.C. 
8415(c) (see 5 U.S.C. 8415(d)), but did not eliminate the higher 
annuity accrual rates under 5 U.S.C. 8415(e) for members of the Capitol 
Police subject to FERS-RAE and FERS-FRAE. The annuity benefits of 
members of the Capitol Police are more closely comparable to another of 
the special employee groups (law enforcement officers, whose annuities 
are computed under 5 U.S.C. 8415(e)) for the purpose of determining 
their FERS normal cost percentage. However, because a member of the 
Capitol Police is not within the FERS definition of

[[Page 93852]]

``law enforcement officer'' at 5 U.S.C. 8401(17), members of the 
Capitol Police are not included in the special category of ``law 
enforcement officers'' under 5 U.S.C. 8423(a)(1)(B) and, therefore, are 
not subject to the normal cost percentage applicable to that group. The 
only special category listed in 5 U.S.C. 8423(a)(1)(B) that does apply 
to members of the Capitol Police is ``Congressional employees.'' Thus, 
despite the fact that the other Congressional employees subject to 
FERS-RAE and FERS-FRAE do not receive enhanced annuity accrual rates, 
OPM must include Capitol Police in the Congressional employee normal 
cost percentage calculation under 5 U.S.C. 8423(a)(1)(B). Therefore, 
OPM proposes to amend 5 CFR 841.403(b) to reflect all Congressional 
employees including members of the Capitol Police in determining the 
FERS, FERS-RAE and FERS-FRAE normal cost percentages for the 
``Congressional Employees'' category.
    OPM proposes to amend 5 CFR 841.403 to also include U.S. Postal 
Service employees as a separate category for which OPM will derive 
normal cost percentages. OPM has determined a government-wide normal 
cost percentage for each category of employee, and USPS employees have 
been included in the category of either ``all other employees'' or 
``law enforcement officer'' under 5 CFR 841.403(c) and (g). In 
reviewing a request of the USPS for reconsideration under 5 U.S.C. 
8423(c), the Board of Actuaries of the Civil Service Retirement System 
has recommended OPM to consider that the supplemental liability under 5 
U.S.C. 8423(b)(1)(B), and the normal cost percentage for USPS employees 
who do not fall under the category of ``law enforcement officer'' at 5 
CFR 841.403(c), be calculated using USPS-specific assumptions regarding 
demographic factors, rather than government-wide demographic 
assumptions. Because of the separate Unites State Postal Service 
funding provisions established the under 5 U.S.C. 8423(b), OPM is 
proposing regulations to provide for the use of USPS-specific 
assumptions regarding demographic factors in the calculation of the 
USPS supplemental liability and in the determination of the normal cost 
percentage for Postal Service employees who do not fall under the 
category of ``law enforcement officer.'' OPM proposes and amends 5 CFR 
841.414, which will provide specific guidance on the calculation of the 
supplemental liability; and OPM proposes to add employees of the USPS, 
who are not ``law enforcement officers'' under 5 CFR 841.403(c), as a 
separate category for which OPM will derive normal cost percentages 
under 5 CFR 841.403.
    OPM also proposes to add sections 841.415 through 841.417. These 
sections would establish the procedures and requirements for a request 
for reconsideration of a supplemental liability determination filed by 
the Secretary of the Treasury or the Postmaster General. Under Sec.  
841.417, the actuarial analysis submitted with the request must 
demonstrate a difference in the supplemental liability of at least 2 
percent of the present value of future benefits calculated in OPM's 
computation of the supplemental liability. The Board of Actuaries 
recommended that the threshold to sustain a request for reconsideration 
be set as a difference in present value of future benefits. OPM's 
actuaries tested the effect of what might be considered substantive 
changes in the demographic assumptions and produced results within a 
range of 0 percent to a decrease of 5.9 percent. As a result, OPM has 
decided that a reasonable threshold requirement for the Board of 
Actuaries to sustain a request for reconsideration of a supplemental 
liability is 2 percent of the present value of future benefits.
    Additionally, OPM proposes to refine its 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. Several provisions of the Civil Service Retirement System 
(CSRS) and the Federal Employees Retirement System (FERS) require 
reduction of annuities on an actuarial basis. For example, OPM applies 
the present value factors to:
    1. Retirees who elect to provide survivor annuity benefits to 
spouses based on post-retirement marriages;
    2. Retiring employees who elect the alternative form of annuity;
    3. Employees who owe certain redeposits based on refunds of 
contributions for service ending before March 1, 1991;
    4. Employees who elect to credit certain service with 
nonappropriated fund instrumentalities; and
    5. Retirees with certain types of retirement coverage errors who 
can elect to receive credit for service by taking an actuarial 
reduction under the provisions of the Federal Erroneous Retirement 
Coverage Correction Act (FERCCA).
    Specifically, OPM proposes to clarify, under 5 CFRs 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 proposes to remove 
Sec.  847.602, which currently provides 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 to include a new section (Sec.  842.616) to describe when the 
present value factors will be published. Additionally, OPM proposes to 
clarify under 5 CFRs 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.

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.

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, Social security.

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.

[[Page 93853]]

5 CFR Part 847

    Administrative practice and procedure, Disability benefits, 
Government employees, Pensions, Reporting and recordkeeping 
requirements, Retirement.


U.S. Office of Personnel Management.
Beth F. Cobert,
Acting Director.

    For the reasons stated in the preamble, the Office of Personnel 
Management proposes to amend 5 CFR parts 831, 839, 841, 842, and 847 as 
set forth below:

PART 831--RETIREMENT

0
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

0
2. Add Sec.  831.117 to read as follows:


Sec.  831.117  Computation of the Supplemental Liability

    (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 Board of Actuaries of the Civil 
Service Retirement System for the most recent valuation of the System.
    (c) Each supplemental liability shall be rounded to the nearest one 
hundred million dollars.
0
3. Amend Sec.  831.303 by revising paragraphs (c)(3) and (d)(3) to read 
as follows:


Sec.  831.303  Civilian service.

* * * * *
    (c) * * *
    (3) For the purpose of paragraph (b)(2) of this section, the term 
``present value factor'' has the same meaning as defined in Sec.  
831.603 and ``time of retirement'' has the same meaning as defined in 
Sec.  831.2202.
    (d) * * *
    (3) For the purpose of paragraph (d)(2) of this section, the term 
``present value factor'' has the same meaning as defined in Sec.  
831.603 and ``time of retirement'' has the same meaning as defined in 
Sec.  831.2202.
0
4. Amend Sec.  831.603 by revising the definition of ``present value 
factor'' to read as follows:


Sec.  831.603  Definitions.

* * * * *
    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 $1 a month and is payable in 
monthly installments for the annuitant's lifetime based on mortality 
rates for annuitants paid from the Civil Service Retirement and 
Disability Fund; and increases each year at an assumed rate of cost of 
living adjustment. Assumed rates of interest, mortality, and cost-of-
living adjustments used in computing the present value are those used 
by the Board of Actuaries of the Civil Service Retirement System for 
valuation of the System based on dynamic assumptions. The present value 
factors are unisex factors obtained as a composite of sex-distinct 
present value factors.
* * * * *
0
5. Amend Sec.  831.2202 by revising the definition of ``present value 
factor'' to read as follows:


Sec.  831.2202  Definitions.

* * * * *
    Present value factor has the same meaning in this subpart as 
defined in Sec.  831.603.
* * * * *

PART 839--CORRECTION OF RETIREMENT COVERAGE ERRORS UNDER THE 
FEDERAL ERRONEOUS RETIREMENT COVERAGE CORRECTIONS ACT

0
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

0
7. Amend Sec.  839.102 by revising the definition of ``present value 
factor'' to read as follows:


Sec.  839.102  Definitions.

* * * * *
    Present value factor has the same meaning in this subpart as 
defined in Sec.  831.603 of this chapter.
* * * * *

PART 841--FEDERAL EMPLOYEES RETIREMENT SYSTEM--GENERAL 
ADMINSTRATION

0
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

0
9. Amend Sec.  841.401 by revising paragraphs (b)(3) and (4), and 
adding paragraph (b)(5) to read as follows:


Sec.  841.401  Purpose and scope.

* * * * *
    (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.
0
10. Amend Sec.  841.402 by revising the definition of ``actuary'' to 
read as follows:


Sec.  841.402  Definitions.

* * * * *
    Actuary means a professional who is qualified under actuarial 
standards of practice in the United States to issue a

[[Page 93854]]

statement of opinion in regard to defined benefit pension plans.
* * * * *
0
11. Amend Sec.  841.403 by revising the introductory text, and 
paragraphs (b) and (g), and adding paragraph (h) to read as follows:


Sec.  841.403  Categories of employees for computation of normal cost 
percentages.

    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 Capitol 
Police;
* * * * *
    (g) Other employees of the United States Postal Service;
    (h) All other employees.
0
12. Revise Sec.  841.409 to read as follows:


Sec.  841.409  Agency right to appeal normal cost percentage.

    (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 Sec.  841.407, a petition for 
appeal that meets all the requirements of Sec.  841.410.
0
13. Revise the section heading of Sec.  841.410 to read as follows:


Sec.  841.410  Contents of petition for appeal of normal cost 
percentage.

* * * * *
0
 14. Revise the section heading of Sec.  841.411 to read as follows:


Sec.  841.411  Appeals procedure of normal cost percentage.

* * * * *
0
15. Add Sec.  841.414 to subpart D to read as follows:


Sec.  841.414  Computation of the supplemental liability.

    (a) OPM will compute each supplemental liability of the Civil 
Service Retirement and Disability Fund using demographic factors 
consistent with those used for the computation of the normal cost 
percentages under Sec.  841.403.
    (b) The supplemental liability will be computed based on the 
economic assumptions determined by the Board for the most recent 
valuation of the Federal Employees Retirement System.
    (c) Each supplemental liability will be rounded to the nearest one 
hundred million dollars.
0
16. Add Sec.  841.415 to subpart D to read as follows:


Sec.  841.415  Right to request reconsideration of the supplemental 
liability.

    (a) The Secretary of the Treasury or the Postmaster General may 
request the Board to reconsider a determination of the amount payable 
with respect to any supplemental liability.
    (b) No request for reconsideration will be considered by the Board 
unless the Secretary of the Treasury or the Postmaster General files, 
no later than 6 months after the date of receipt of the first notice of 
the amount payable with respect to the supplemental liability, a 
request for reconsideration that meets all the requirements of Sec.  
841.416.
0
17. Add Sec.  841.416 to subpart D to read as follows:


Sec.  841.416  Contents of a request for reconsideration of the 
supplemental liability.

    (a) To request reconsideration of the amount payable with respect 
to the supplemental liability, the Secretary of the Treasury or the 
Postmaster General must file with OPM--
    (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 Sec.  841.404; 
and
    (4) Use the economic assumptions under Sec.  841.414(b). When a 
request is based in whole or in part on a pattern of merit salary 
increases, the report may include an analysis of the economic 
assumptions concerning salary and wage growth to take into account the 
combined effect of merit and general wage and salary growth.
0
18. Add Sec.  841.417 to subpart D to read as follows:


Sec.  841.417  Reconsideration of the supplemental liability.

    (a) The Board cannot sustain a request for reconsideration unless 
the Board finds that--
    (1) The data used in the actuarial report required by Sec.  841.416 
are sufficient and reliable;
    (2) The assumptions used in the actuarial report required by Sec.  
841.416 are justified; and
    (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

0
19. 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

0
20. Amend Sec.  842.602 by revising the definition of ``present value 
factor'' to read as follows:


Sec.  842.602  Definitions.

* * * * *
    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 $1 a month and is payable in 
monthly installments for the annuitant's lifetime

[[Page 93855]]

based on mortality rates for annuitants paid from the Civil Service 
Retirement and Disability Fund; and increases each year at an assumed 
rate of cost-of-living adjustment. Assumed rates of interest, 
mortality, and cost-of-living adjustments used in computing the present 
value are those used by the Board of Actuaries of the Civil Service 
Retirement System for valuation of the Federal Employees' Retirement 
System based on dynamic assumptions. The present value factors are 
unisex factors obtained as a composite of sex-distinct present value 
factors. Separate present value factors apply for FERS annuities that 
receive cost-of-living adjustments before the retiree attains age 62, 
versus FERS annuities that do not receive cost-of-living adjustments 
before the retiree attains age 62.
* * * * *
0
21. Add Sec.  842.616 to subpart F to read as follows:


Sec.  842.616  Publication of present value factors.

    When OPM publishes in the Federal Register notice of normal cost 
percentages under Sec.  841.407 of this chapter, it will also publish 
updated present value factors.
0
22. Amend Sec.  842.702 by revising the definition of ``present value 
factor'' to read as follows:


Sec.  842.702  Definitions.

* * * * *
    Present value factor has the same meaning in this subpart as 
defined in Sec.  842.602.
* * * * *

PART 847--ELECTIONS OF RETIREMENT COVERAGE BY CURRENT AND FORMER 
EMPLOYEES OF NONAPPROPRIATED FUND INSTRUMENTALITIES

0
23. 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, December 28, 2001, 115 Stat 1242; 
5 U.S.C. 8347(a) and 8461(g) and section 1043(b) of Pub. L. 104-106, 
Div. A, Title X, Feb. 10, 1996, 110 Stat. 434. Subpart B also issued 
under 5 U.S.C. 8347(q) and 8461(n).

Subpart A--General Provisions

0
24. Amend Sec.  847.103(b) by revising the definition of ``actuarial 
present value'' and adding the definition of ``present value factor'' 
in alphabetical order as follows:


Sec.  847.103  Definitions.

* * * * *
    (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 Sec.  842.602.
* * * * *


Sec.  847.602  [Removed and Reserved]

0
25. Remove and reserve Sec.  847.602.
[FR Doc. 2016-30487 Filed 12-21-16; 8:45 am]
 BILLING CODE 6325-38-P