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Rule

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

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Information about this document as published in the Federal Register.

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Start Preamble

AGENCY:

Office of Personnel Management.

ACTION:

Final rule.

SUMMARY:

The Office of Personnel Management (OPM) is issuing an interim 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, demographic and mortality assumptions adopted by the Board of Actuaries and published in the Federal Register on June 3, 2011, as required by 5 U.S.C. 8461(i).

DATES:

This rule is effective August 23, 2011.

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FOR FURTHER INFORMATION CONTACT:

Roxann Johnson, (202) 606-0299.

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SUPPLEMENTARY INFORMATION:

OPM has published a notice in the Federal Register at 76 FR 32242 (June 3, 2011) 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, new demographic factors and mortality assumptions adopted by the Board of Actuaries of the Civil Service Retirement System. By statute under 5 U.S.C. 8461(i), the demographic factors, economic and mortality 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 Start Printed Page 52540attained 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.

Waiver of General Notice of Proposed Rulemaking

Under section 553(b)(B) and (d)(3) of title 5, United States Code, I find that good reason exists for waiving the general notice of proposed rulemaking and for making these amendments effective in less than 30 days. The amendments made by this rule are statutorily mandated as a result of changes in economic assumptions that were published on June 3, 2011. Providing a comment period on the result of mathematical computations resulting from the changed economic assumptions is unnecessary and, to the extent that it would delay benefit payments, is contrary to the public interest.

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.

Start List of Subjects

List of Subjects in 5 CFR Part 843

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U.S. Office of Personnel Management.

John Berry,

Director.

End Signature

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

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

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

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

End Authority

Subpart C—Current and Former Spouse Benefits

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

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Basic employee death benefit.
* * * * *

(b) * * *

(2) For deaths occurring on or after October 1, 2004, 36 equal monthly installments of 3.01643 percent of the amount of the basic employee death benefit.

* * * * *
Start Amendment Part

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

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Appendix A to Subpart C of Part 843—Present Value Conversion Factors for Earlier Commencing Date of Annuities of Current and Former Spouses of Diseased Separated Employees

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

Age of separated employee at birthday before deathMultiplier
26.0581
27.0620
28.0687
29.0723
30.0807
31.0869
32.0933
33.1013
34.1086
35.1186
36.1273
37.1376
38.1474
39.1612
40.1737
41.1877
42.2026
43.2192
44.2365
45.2550
46.2757
47.2987
48.3222
49.3488
50.3767
51.4079
52.4410
53.4776
54.5176
55.5609
56.6081
57.6588
58.7152
59.7767
60.8441
61.9183

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

Age of separated employee at birthday before deathMultiplier
36.1516
37.1636
38.1756
39.1915
40.2066
41.2233
42.2410
43.2606
44.2811
45.3032
46.3279
47.3549
48.3829
49.4143
50.4475
51.4843
52.5235
53.5669
54.6139
55.6652
56.7208
57.7811
58.8476
59.9203

With at least 30 years of creditable service—

Age of separated employee at birthday before deathMultiplier by separated employee's year of birth
After 1966From 1950 through 1966
46.4213.4572
47.4557.4943
48.4918.5335
49.5318.5768
50.5744.6231
51.6213.6738
52.6714.7282
53.7267.7880
54.7866.8528
55.8518.9233
56.92271.0000
End Appendix End Supplemental Information

[FR Doc. 2011-21396 Filed 8-22-11; 8:45 am]

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