SUPPLEMENTARY INFORMATION:

OPM published the present value factors currently in effect on April 14, 2023, at 88 FR 23109. In this edition of the Federal Register , OPM also publishes a notice to revise the normal cost percentage under the Federal Employees' Retirement System (FERS) Act of 1986, Public Law 99-335, based on changed actuarial assumptions adopted by the Board of Actuaries of the Civil Service Retirement System. Under 5 U.S.C. 8461(i), those changes require corresponding changes in the present value factors used to produce actuarially equivalent benefits when required by the FERS Act. The revised factors will become effective on October 1, 2026, to correspond with the changes in FERS normal cost percentages.

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. The paragraphs below summarize each scenario where the present value factors are used.

Alternative Form of Annuity

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) and will apply to annuities that commence on or after October 1, 2026.

Post-Retirement Marriages Survivor Annuities

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), 8416(c), or 8417(b). Under 5 U.S.C. 8416(b), 8416(c), and 8417(b) Congress enacted provisions that permitted OPM to cease collection of these survivor election deposits by means of either a lump-sum payment or 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 new factors will apply to survivor reductions that commence on or after October 1, 2026.

Nonappropriated Fund Instrumentalities Service Credit

Subpart F of 5 CFR part 847, prescribes the use of present value 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 5 U.S.C. 8461(n). Subpart I of 5 CFR part 847 prescribes the use of present value factors for employees that elect to credit nonappropriated fund instrumentality service to qualify for immediate retirement under section 1132 of Public Law 107-107 (115 Stat. 1242). The new factors will apply to cases in which the date of computation under 5 CFR 847.603 or 847.809 is on or after October 1, 2026.

OPM is, therefore, revising the tables of present value factors to read as follows:

( printed page 37436)

91 FR 37435