5 U.S.C. 8461; Sec. 841.108 also issued under 5 U.S.C. 552a; 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.
The purpose of this subpart is to state the administrative rules governing the operations of the Federal Employees Retirement System (FERS) that have general application to the basic benefits under FERS.
(a) This part contains the following subparts:
(1) General provisions (subpart A);
(2) Applications for benefits (subpart B);
(3) Claims processing (subpart C);
(4) Government costs (subpart D);
(5) Employee deductions and Government contributions (subpart E);
(6) Computing interest (subpart F);
(7) Cost-of-Living Adjustments (subpart G);
(8) Waiver, allotment, or assignment of benefits (subpart H);
(9) Court orders affecting benefits (subpart I); and
(10) State income tax withholding (subpart J).
(b)(1) Part 842 of this chapter contains information about basic annuity rights of employees and Members under FERS.
(2) Part 843 of this chapter contains information about death benefits and employee refunds under FERS.
(3) Part 844 of this chapter contains information about disability retirement benefits under FERS.
(4) Part 845 of this chapter contains information about debt collection.
(5) Part 846 of this chapter contains information about election rights available to employees who are eligible to join FERS.
(c)(1) Part 831 of this chapter contains information about the Civil Service Retirement System.
(2) Part 835 of this chapter contains information about debt collection from FERS benefits.
(3) Part 837 of this chapter contains information about reemployment of FERS annuitants.
(4) Part 838 of this chapter contains information about court orders affecting FERS benefits.
(5) Part 847 of this chapter contains information about elections under the Civil Service Retirement System or FERS relating to periods of service
(6) Parts 294 and 297 of this chapter and § § 831.106 and 841.108 of this chapter contain information about disclosure of information from OPM records.
(7) Part 581 of this chapter contains information about garnishment of Government payments including salary and CSRS and FERS retirement benefits.
(8) Parts 870, 871, 872, and 873 of this chapter contain information about the Federal Employees Group Life Insurance Program.
(9) Part 890 of this chapter contains information about coverage under the Federal Employees Health Benefits Program.
(10) Chapter II (parts 1200 through 1299) of this title contains information about appeals to the Merit Systems Protection Board.
(11) Chapter VI (parts 1600 through 1699) of this title contains information about the Federal Employees Thrift Savings Plan.
In this subpart—
(a) Unless otherwise defined for use in any subpart, as used in connection with FERS (parts 841 through 846 of this chapter), terms defined in section 8401 of title 5, United States Code, have the same meanings assigned to them by that section.
(b) Unless otherwise defined for use in any subpart, as used in connection with FERS (parts 841 through 846 of this chapter)—
(a) OPM has charge of the adjudication of all claims for basic benefits arising under FERS and of all matters directly or indirectly concerned with these adjudications.
(b) In the adjudication of claims arising under FERS, OPM will consider and take appropriate action on counterclaims filed by the Government as set-offs against amounts payable from the Civil Service Retirement Fund.
(a) Agencies having employees or Members subject to FERS must establish and maintain retirement accounts for those employees and Members.
(b)(1) The individual retirement record required by § 841.504(c) is the basic record for action on all claims for annuity or refund, and those pertaining to deceased employees, deceased Members, or deceased annuitants.
(2) When the official records repository for the records in question certifies that the records in question are lost, destroyed, or incomplete, OPM will accept such inferior or secondary evidence that it considers appropriate under the circumstances, and such inferior or secondary evidence is then admissible.
(3) Except as provided in paragraph (b)(2) of this section, inferior or secondary evidence will not be considered.
Interest, when applicable, will be computed under subpart F of this part.
(a)(1) Except as provided in section 8461 of title 5, United States Code, OPM has in its possession or under its control records containing the following types of information:
(i) Documentation of Federal service subject to FERS.
(ii) Documentation of service credit and refund claims made under FERS.
(iii) Retirement and death claims files, including documents supporting the retirement application, health benefits and life insurance eligibility, medical records supporting disability claims, and designations of beneficiaries.
(iv) Claims review and correspondence files pertaining to benefits under the Federal Employees Health Benefits Program.
(v) Documentation of claims made for life insurance and health benefits by annuitants under a Federal Government retirement system other than FERS.
(2) These records may be disclosed to the individual to whom the information pertains, or, with prior written consent of the individual, to any agency or other person, except that medical evidence about which a prudent physician would hesitate to inform the individual, will be disclosed only to a licensed physician designated in writing for that purpose by the individual or by his or her representative.
(3) Federal employee retirement records will be disclosed consistent with the provisions of the Privacy Act of 1974 (5 U.S.C. 552a), including, but not limited to, disclosures pursuant to a routine use promulgated for such records and printed in OPM's periodic publication of notices of systems of records. However, a beneficiary designated in accordance with FERS (5 U.S.C. 8424(c)) will, during the lifetime of the designator, be disclosed to the designator only, at his or her signed written request. Such beneficiary designations that may appear in records being disclosed to other than the designator must be removed before the record is disclosed. If information pertaining to a designation of beneficiary is specifically asked for by a court of competent jurisdiction, it may be released to the court, but with a written notice that it is released under protest.
(4) Except as provided in paragraphs (a)(2) and (a)(3) of this section, OPM will not disclose information from the files, records, reports, or other papers and documents pertaining to a claim filed with OPM, whether potential, pending, or adjudicated. This information is privileged and confidential.
(b) On written request OPM will return, to the person entitled to them, certificates of discharge, adoption papers, marriage certificates, decrees of divorce, letters testamentary or of administration, when they are no longer needed in the settlement of the claim. If papers returned constitute part of the material and essential evidence in a claim, OPM will retain copies of them or of the parts of them that appear to be of evidentiary value.
In computing a period of time for filing documents, the day of the action or event after which the designated period of time begins to run is not included. The last day of the period is included unless it is a Saturday, a Sunday, or a legal holiday; in this event, the period runs until the end of the next day which is not a Saturday, a Sunday, or a legal holiday.
This subpart states the general application requirement applicable under the Federal Employees Retirement System (FERS). Specific application requirements for particular benefits are contained with the regulations concerning those benefits.
(a) No benefit is payable under FERS, until after the claimant has applied for the benefit in the form prescribed by OPM.
(b) An employee, Member, or survivor may exercise any option or make any election authorized by FERS only in the form prescribed by OPM.
(a) Except as provided in paragraphs (b) and (c) of this section, an applicant for benefits under FERS may withdraw his or her application for benefits until
(b) An applicant for benefits under FERS may not withdraw his or her application for benefits after OPM has received a certified copy of a court order (under part 581 of this chapter or subpart I of this part) affecting the benefits.
(c) When an “appropriate authority” determines that the separation upon which payment has been based is an “unjustified or unwarranted personnel action” as these terms are defined in § 550.804 of this chapter, an individual may withdraw his/her application for FERS benefits within 60 days of the decision. As provided in § 550.805, any FERS payments must be deducted from any back pay award.
(a) A former employee is deemed to have filed an application for annuity if the former employee—
(1) Was not reemployed in a position subject to FERS under subpart A of part 842 of this chapter on the date of death;
(2) Dies after separation from Federal service but before actually filing an application for benefits; and
(3) At the time of separation from Federal service, was eligible for an immediate annuity under § 842.204(a)(1) and was eligible to elect to postpone the commencing date of that annuity under § 842.204(c) of this chapter.
(b) For the purpose of determining entitlement to a survivor annuity, a former employee who is deemed to have filed an application under paragraph (a) of this section is considered to have died as a retiree.
(c) For purposes of determining the amount of a survivor annuity, the annuity of a former employee who, under paragraph (a) of this section, is deemed to have filed an application is computed as though the commencing date were the first day of the month after the former employee's death.
(a) This subpart explains—
(1) The procedures that employees. separated employees, retirees, and survivors must follow in applying for benefits under FERS;
(2) The procedures that OPM will generally follow in determining eligibility for benefits under FERS;
(3) The appeal rights available to claimants adversely affected by OPM decisions under FERS; and
(4) The special rules for processing competing claimant cases under FERS.
(b) This subpart does not apply to processing—
(1) Forfeiture of annuity for conviction of certain criminal offenses relating to national security under subchapter II of chapter 83 of title 5, United States Code (processed under subpart K of part 831 of this chapter);
(2) Court orders affecting FERS benefits (processed under subpart I of this part); or
(3) Collection of debts due to the United States (processed under part 845 of this chapter).
In this subpart—
(a) Employees filing applications for retirement or to make deposits or redeposits under FERS (including applications for disability retirement) and separating employees filing applications for refunds of contributions must file their applications with their employing agencies.
(b) Survivors filing applications for death benefits based on the death of an employee may file their applications with the employee's employing agency.
(a) Separated employees filing applications for retirement or refunds of contributions; survivors filing applications for death benefits based on the deaths of separated employees, retirees, or survivors; and retirees making elections or seeking to change information in their retirement records must file their applications with OPM.
(b) Survivors filing applications for death benefits based on the death of an employee may file their applications with OPM.
(a) A OPM decision under FERS is subject to reconsideration by OPM, whenever the decision is in writing and states the right to reconsideration.
(b) OPM will reconsider a decision subject to reconsideration under § 841.306. A decision subject to reconsideration is not subject to appeal under § 841.308.
(a)
(b)
(2) A request for reconsideration of a decision to collect a debt will be made in accordance with § 845.204(b).
(3) A decision on court orders affecting FERS benefits will be made in accordance with subpart I of this part.
(c)
(d)
(2) The Associate Director's representative responsible for reconsiderations may extend the time limit for filing when the requestor shows that he or she was not notified of the time limit and was not otherwise aware of it, or that he or she was prevented by circumstances beyond his or her control from making the request within the time limit.
(e)
OPM may issue a final decision providing the opportunity to appeal under § 841.308 rather than an opportunity to request reconsideration under § 841.306. Such a decision must be in writing and state the right to appeal under § 841.308.
Except as noted in this paragraph, an individual whose rights or interests under FERS are affected by a final decision of OPM may request MSPB to review the decision in accord with procedures prescibed by MSPB. Decisions made in accord with the procedures referenced in § 841.306(b)(1) are made under subchapter II of chapter 83, title 5, United States Code. Such decisions are not appealable to MSPB under section 8461(e) of title 5, United States Code.
(a) Competing claimants are applicants for survivor benefits based on the service of an employee, separated employee, or retiree when—
(1) A benefit is payable based on the service of the employee, separated employee, or retiree; and
(2) Two or more claimants have applied for benefits based on the service of the employee, separated employee, or retiree; and
(3) An OPM decision in favor of one claimant will adversely affect another claimant(s).
(b) In cases involving competing claimants, the Associate Director or his or her designee will issue a final decision that will be in writing, will fully set forth findings and conclusions, and will contain notice of the right to appeal provided in § 841.308. Copies of the final decision will be sent to all competing claimants.
(c)(1) When OPM receives applications from competing claimants before any payments are made based on the service of the employee or Member, OPM will begin payments to the claimant(s) found entitled in the decision issued under paragraph (b) of this section.
(2) When OPM does not receive an application from a competing claimant(s) until after another person has begun to receive payments based on the service of the employee or Member, the payments will continue until a decision is issued under paragraph (b) of this section. When a decision is issued under paragraph (b) of this section, OPM will—
(i) If OPM affirms its earlier decision, continue payments to the claimant(s) OPM originally determined to be entitled; or
(ii) If OPM reverses its earlier decision, suspend payment to the claimant(s) OPM originally determined to be entitled and immediately begin payment to the claimant(s) OPM determines to be entitled in its decision under paragraph (b) of this section. OPM will not take action to collect the overpayment until the time limit for filing an appeal has expired or the MSPB has issued a final decision on a timely appeal, whichever comes later.
(a) The purpose of this subpart is to regulate the Government contributions to the Civil Service Retirement Fund under FERS.
(b) This subpart covers—
(1) Factors considered in the computation of agency contributions under FERS;
(2) Publication of notice of the normal cost rates for each category of employees;
(3) Agency appeals of rate determinations; and
(4) Methodology for determining the amount due from each agency.
In this subpart—
Normal cost percentages will be determined for each of the following groups of employees:
(a) Members;
(b) Congressional employees;
(c) Law enforcement officers, firefighters, and employees under section 302 of the Central Intelligence Agency Act of 1964 for Certain Employees;
(d) Air traffic controllers;
(e) Military reserve technicians;
(f) Employees under section 303 of the Central Intelligence Agency Act of 1964 for Certain Employees when serving abroad;
(g) All other employees.
(a) The Office of Personnel Management (OPM) will consider the factors listed below in determining normal cost percentages. To the extent data are available for the factor by specific category of employees, such data will be used. To the extent category specific data are not available, the most relevant available data will be used.
(1) Distributions of new entrants by age, sex, and service;
(2) Withdrawal rates;
(3) Merit salary increases;
(4) Voluntary retirement rates;
(5) Involuntary retirement rates;
(6) Disability retirement rates;
(7) Employee death rates;
(8) Military service rates;
(9) Family characteristics for employees;
(10) Death rates for non-disability annuitants;
(11) Death and recovery rates for disability annuitants;
(12) Child survivor termination and death rates;
(13) Family characteristics for annuitants; and
(14) Administrative expenses.
(b) Generally, each rate, ratio, or fraction must be separately considered to determine the rates for males and their survivors and the rates for females and their survivors, except those rates for child survivors and merit salary increases.
The determinations of the normal cost percentage will be based on the economic assumptions determined by the Board. When an agency's case is based in whole or in part on the pattern of merit salary increases specific to the agency or to a category of employees within the agency, the Board may require modification of the economic assumptions concerning salary and wage growth to take into account the combined effect of merit and general wage and salary increases.
(a) OPM will determine the Government-wide normal cost percentage 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 § 841.412.
(b) Each normal cost percentage will be rounded to the nearest one-tenth of a percent.
(a) No later than 5 years after the publication of a current notice of normal cost percentages, OPM will publish in the
(b) The notice of normal cost percentage will include a statement of—
(1) The Government-wide normal cost percentage and any single agency rates for each category of employees;
(2) The effective date of any changes made by the notice;
(3) The address for obtaining information on the data and assumptions used in computing the normal cost percentages;
(4) The time limit for submission of appeals under § 841.409; and
(5) The address for filing an appeal under § 841.409.
(a) Except as provided in paragraph (b) of this section and in § 841.412, normal cost percentages stated in a notice of normal cost percentages under § 841.407 will be effective at the beginning of the first full pay period of the first fiscal year that commences at least 3 months after the date of publication of the notice.
(b) The initial normal cost percentages will be effective at the beginning of the first pay period on or after January 1, 1987.
(a)(1) 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.
(2) The Secretary of the Treasury or the Postmaster General may request the Board to reconsider a determination of the amount of any supplemental liability due from the Treasury of the United States or the United States Postal Service, respectively.
(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 § 841.407, a petition for appeal that meets
(c) 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 notice of supplemental liability, a request for reconsideration supported by an actuarial report similar to the report described in § 841.410(c).
(a) To file an appeal, an agency head must, before expiration of the time limit, file with OPM—
(1) A letter of appeal;
(2) An actuarial report; and
(3) A certificate of eligibility (described in paragraph (d) of this section).
(b)(1) The letter of appeal must be in writing and signed by the agency head. Delegation of signatory authority is not permitted.
(2) The letter of appeal may contain any argument the agency wishes to make or may simply submit the actuarial report for consideration.
(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 use of the Government-wide rate. The actuarial report must—
(1) Be signed by an actuary;
(2) Use the economic assumptions under §841.405; and
(3) Specifically address and consider each of the demographic factors listed in § 841.404. The appealing agency is responsible for developing data relating to the first nine demographic factors as they relate to the category of agency employees for which the appeal is being filed. Government-wide demographic factors (available from OPM) will be presumed to be sufficient and
(d) The certificate of eligibility is a letter from the agency's director of personnel certifying that the agency has the requisite 1,000 or 500 in the category of employees under consideration.
(a) A Government-wide normal cost percentage is presumed to apply to all agencies. Any agency appealing application of a Government-wide normal cost percentage to any category of employees in its workforce must demonstrate to the satisfaction of the Board that the normal cost percentage for that category of employees in that agency is significantly different from the Government-wide normal cost percentage.
(b) While an agency has an appeal pending, the Government-wide normal cost percentage continues to apply to that agency.
(c) The Board cannot consider an appeal unless all the documents required for a petition for appeal under § 841.410(a) are filed before expiration of the time limit for an appeal.
(d) The Board cannot sustain an appeal unless the Board finds that—
(1) The data used in the agency's actuarial analysis are sufficient and reliable (As a general rule, at least 5 years of data pertaining to any group of employees must be analyzed before the results are considered sufficient and reliable.);
(2) The assumptions used in the agency's actuarial analysis are justified;
(3) When all relevant factors are considered together, there is a demonstrated difference between the normal cost for the group at issue in the appeal and the normal cost for the same group calculated on a Government-wide basis; and
(4) The difference between the Government-wide normal cost percentage and the single agency rate would be at least 10 percent of the normal cost being appealed.
(a) If the Board finds that a different normal cost is warranted based on an agency appeal, it will establish a single agency rate for the category of employees in that agency.
(b) The single agency rate will be effective at the beginning of the first pay period beginning 30 days after the date of the Board's decision.
(c) A single agency rate may be higher or lower than the Government-wide rate and will remain in force for not less than 3 years.
(d) After a single agency rate has been in force for at least 3 years, OPM may—
(1) Require, no more often than annually, that the agency justify continuation of the rate; and/or
(2) When it publishes a notice of normal cost percentages under § 841.407, terminate the single agency rate.
(a) For each pay period, each agency will determine the total amount of basic pay paid to employees in each category of employees.
(b) For each category of employees, the amount due from each agency for a pay period is the product of—
(1) The total amount of basic pay of employees in that category of employees in that agency; and
(2) The normal cost percentage.
This subpart contains regulations concerning deductions from employees’ pay and government contributions for FERS coverage.
In this subpart—
(a) Except as provided in paragraph (b) of this section, the rate of employee deductions from basic pay for FERS coverage is seven percent of basic pay minus the percent of tax which is (or would be) in effect for the payment, for the employee cost of social security.
(b) The rate of employee deductions from basic pay for FERS coverage for a Member, law enforcement officer, firefighter, air traffic controller, Congressional employee, or employee under section 302 of the Central Intelligence Agency Act of 1964 for Certain Employees is seven and one-half percent of basic pay, minus the percent of tax which is (or would be) in effect for the payment, for the employee cost of social security.
(c) Employee deductions will be at the rate in paragraph (a) or (b) of this section as if social security deductions were being made even if social security deductions have ceased because of the amount of earnings during the year, or are not made for any other reason.
(a) Each employing agency is required to contribute the total amount of the normal cost percentage for each category of its employees, determined under § 841.413 of this part, to the Fund.
(b) Each employing agency must withhold the appropriate amount of employee deductions from the basic pay paid each covered employee for
(c) An employing agency must record the appropriate amount of employee deductions on an individual retirement record maintained for each employee in the manner prescribed by OPM.
(d) When an employee separates from Federal service or transfers to another agency, or transfers to a position in which he or she is not covered by FERS, the agency must close the employee's Individual Retirement Record (IRR) and forward it to OPM within the time standards prescribed by OPM. However, if an employee transfers to another position covered under FERS—
(1) Within the same agency, and
(2) To a position serviced by another payroll office, the agency may, in lieu of forwarding an IRR to OPM at the time of the intra-agency transfer, record the transfer for future IRR certification in an internal automated system of records.
(e) An agency must maintain payroll systems and records in such manner as to permit accurate and timely reporting to OPM, in the manner prescribed by OPM.
(f) An agency must report the employee deduction and agency contribution amounts for each pay period in the manner prescribed by OPM.
(g) An agency must make such other reports of the normal cost, employee deductions and Government contributions amounts as are prescribed and in the manner prescribed by OPM.
(h) An agency must remit in full the total amount of normal cost (which includes both employee deductions and Government contributions), so that payment is received by the Fund on the day of payment to the employee of the basic pay from which the employee deductions were made.
(i) Upon the death of an employee whose tour of duty is less than full time, the employing agency must certify to OPM—
(1) The number of hours that the employee was entitled to basic pay (whether in a duty or paid-leave status) in the 52-week work year immediately preceding the end of the last pay period in which the employee was in a pay status; and
(2) If the employee's tour of duty was part time (regularly scheduled), the number of hours of work in the employee's tour of duty.
(a) When it is determined that an agency has paid less than the correct total amount of the normal cost for any or all of its current or past employees, for any reason whatsoever, including but not limited to, coverage decisions, correction of the percentage applicable or of the amount of basic pay, or additional payment of basic pay, the agency must pay the total additional amount payable under 5 U.S.C. 8423 and subpart D of the this part to the Fund.
(b) The agency withholds the appropriate employee deduction from any payment of additional basic pay which is part of, or the result of, the corrective action.
(c) The payment to the Fund described in paragraph (a) of this section shall be made as soon as possible, but not later than provided by standards established by OPM, regardless of whether or when the portion which should have been deducted from employee basic pay is recovered by the agency.
(d) Any portion of the payment to the Fund described in paragraph (a) of this section which should have been deducted, but was not, from employee basic pay constitutes an overpayment of pay, subject to collection by the agency from the employee, unless waived under applicable authority such as 5 U.S.C. 5584.
(e) Corrections and the related agency payments and employee deductions will be reported to OPM in the manner prescribed by OPM.
(a)
(2) When the MSPB initial decision cancelling the employee's separation becomes final, when the Board issues a final order cancelling the retiree's separation, or when the agency agrees to cancel the separation, the employing agency must notify OPM of the date the interim appointment ends and request the amount of the erroneous payment to be recovered under § 550.805(e) of this chapter from any back pay adjustment to which the employee may be entitled.
(b)
(a) When an “appropriate authority” determines that there has been an “unjustified or unwarranted personnel action” as these terms are defined in subpart H of part 550 of this title, the employing agency will pay the Fund the amount of the normal cost percentage of the basic pay included in back pay. The normal cost percentage owed the Fund is computed on the amount of gross basic pay without regard to deductions described in § 550.805(e) of this chapter for other amounts earned or erroneous payments received.
(b) The agency will withhold the appropriate employee deductions from the amount of basic pay included in gross back pay giving due regard to deductions described in § 550.805(e) of this chapter.
(c) The payment to the Fund described in paragraph (a) of this section shall be made within the time period established by OPM standards.
(d)(1) Any FERS benefits—lump-sum payments or annuity benefits—paid based on a separation that is later cancelled are considered erroneous payments that must be repaid to OPM. Agencies must deduct such payments from any back pay adjustment to which the employee may be entitled as required by 5 CFR 550.805(e).
(2) Amounts recovered from back pay will not be subject to waiver consideration under 5 U.S.C. 8470(b). If there is no back pay, or the back pay is insufficient to recover the entire erroneous payment, the employee may request that OPM waive recovery of the uncollected portion of the overpayment. If waiver is not granted, the employee must repay the erroneous payment.
The employee deductions specified in § 841.503 are effective on the later of the first day of the first pay period beginning in 1987 or the first day an employee is covered by FERS.
This subpart regulates the computation of interest under the Federal Employees Retirement System (FERS).
(a) Retirement deductions made from the basic pay of an employee under subpart E of part 841 of this chapter;
(b) Amounts deposited by an employee for periods of service (including military service) for which—
(1) No retirement deductions were made; or
(2) Deductions were refunded to the employee; and
(c) Interest compounded annually on the deductions and deposits at a rate which, for any calendar year, will be equal to the overall average yield to the Civil Service Retirement Fund during the preceding fiscal year from all obligations purchased by the Secretary of the Treasury during that fiscal year under section 8348(c), (d), and (e) of title 5, United States Code, as determined by the Secretary of the Treasury. Interest on deductions and deposits does not include interest—
(1) If the service covered by the deductions totals 1 year or less; or
(2) For a fractional part of a month in the total service.
For calendar year 1985 and for each subsequent calendar year, OPM will publish a notice in the
(a) Interest on civilian service credit deposits is computed under § 842.305 of this chapter.
(b) Interest on military service credit deposits is computed under § 842.307 of this chapter.
(c) In the case of a retirement coverage error that was corrected under part 839 (pertaining to errors that lasted for at least 3 years of service after December 31, 1986) in which:
(1) A CSRS service credit deposit was made; and
(2) There is a subsequent retroactive change to FERS, the excess of the amount of the CSRS civilian or military service credit deposit over the FERS civilian or military deposit, together with interest computed under § 842.305 of this chapter, shall be paid to the employee or annuitant. In the case of a deceased employee or annuitant, payment is made to the individual entitled to lump-sum benefits under subpart B of part 843 of this chapter.
(a) Interest on each Individual Retirement Record is computed separately.
(b) For determining the amount of interest in the unexpended balance when none of the employee deductions have been returned (e.g., employee refunds or at the time of retirement), the amount of interest in the unexpended balance equals the sum of the amounts of interest applicable to each calendar year's deductions. The amount of interest on each calendar year's deductions equals the sum of—
(1) For the calendar year in which the deductions were taken—
(i) Except during the last year of service, the amount of the employee's deductions for that calendar year times the rate of interest set under § 841.603 for that calendar year times the fraction whose numerator is the number of full months when deductions were withheld and whose denominator is 24;
(ii) During the last year of service, the amount of the employee's deductions for that year times the rate of interest set under § 841.603 for that year times the fraction—
(A) Whose numerator equals the sum of—
(B) Whose denominator is 12.
(2) For each calendar year after the year when the deductions were withheld but before the calendar year of the computation, the amount of the employee's deductions plus interest for prior years, times the rate of interest set under § 841.603 for that year; and
(3) For the year of the computation—
(i) If it is not the same calendar year that the deductions were withheld, the
(ii) If it is the same calendar year that the deductions were withheld, the amount of the employee's deductions for that year times the rate of interest set under § 841.603 for that year times the fraction—
(A) Whose numerator equals the sum of—
(B) Whose denominator is 12.
(c)(1) For adding interest to the unexpended balance after retirement, the unexpended balance including interest computed under paragraph (b) of this section is computed as of the time of retirement.
(2) Each month after retirement, the unexpended balance is reduced by the amount of annuity paid and interest is added to the remaining portion at the rate computed as follows:
(i) Add one to the interest rate under § 841.603 for the current year.
(ii) Raise the sum produced under paragraph (c)(2)(i) of this section to the
(iii) Subtract one from the result of paragraph (c)(2)(ii) of this section to produce the interest rate for the month.
(d)(1) Interest on payments of the unexpended balance will be paid for the month unless the payment has been authorized before the 5th workday before the end of the month (excluding the 31st day of 31-day months).
(2) For the purposes of paragraph (d)(1) of this section, payment is authorized when the person with authority to approve the claim approves payment.
Interest on deposits under subpart F of part 842 of this chapter is compounded annually and accrued monthly.
(a) The initial interest on each monthly difference between the reduced annuity rate and the annuity rate actually paid equals the amount of the monthly difference times the difference between—
(1) One and six tenths raised to the power whose numerator is the number of months between the date when the monthly difference in annuity rates occurred and the date when the initial interest is computed and whose denominator is 12; and
(2) One.
(b) The total initial interest due is the sum of all of the initial interest on each monthly difference computed in accordance with paragraph (a) of this section.
(c) Additional interest on any uncollected balance will be compounded annually and accrued monthly. The additional interest due each month equals the remaining balance due times the difference between—
(1) One and six tenths raised to the
(2) One.
Interest on overpayment debts is computed under § 845.205(b).
(a) The purpose of this subpart is to regulate computation of cost-of-living adjustments (COLA's) for basic benefits under the Federal Employees Retirement System (FERS).
(b) This subpart provides the methodology for—
(1) Computing COLA's on each type of FERS basic benefit subject to COLA's; and
(2) Computing COLA's on annuities partially computed under FERS and partially computed under the Civil Service Retirement System (CSRS).
(c) COLA's on children's annuities are not covered by this subpart because COLA's on children's annuities are computed under CSRS rules.
In this subpart—
(a) Except as provided in §§ 841.704, 841.706, and 841.707, and paragraph (e) of this section, COLA's on basic annuities and survivor annuities are the greater of—
(1) One dollar per month; or
(2)(i) If the percentage change is less than 2 percent, the percentage change;
(ii) If the percentage change is at least 2 percent and not greater than 3 percent, 2 percent; and
(iii) If the percentage change exceeds 3 percent, 1 percentage point less than the percentage change.
(b) After survivor annuities commence, they are subject to COLA's computed under paragraph (a) of this section, even if they are based on a basic employee annuity that includes a CSRS component.
(c) COLA's apply to basic annuities (not to annuity supplements), survivor annuities, and survivor supplements.
(d) COLA's do not apply for annuitants who are under age 62 as of the effective date, except—
(1) Survivors;
(2) Disability retirees (other than disability retirees whose benefits is based on 60% of high-3 average salary);
(3) Retirees who retired under § 842.208 of this chapter (the special provisions for law enforcement officers and firefighters);
(4) Retirees who retired under § 842.207 of this chapter (the special provision for air traffic controllers);
(5) Retirees who retired under § 842.210 of this chapter (the special provision for military reserve technicians who ceased satisfying the requirements of their position) due to a disability.
(e)(1) Except as provided in paragraph (e)(2) of this section, COLA's are not payable to disability retirees during the first year.
(2) COLA's are payable to disability retirees during the first year if the annuity rate payable is the retiree's earned benefit or the annuity is redetermined because the retiree has reached age 62.
(3) After the first year, both the disability benefit and the social security offset (it any) are increased by COLA's. Disability retirees’ earned benefits also increase with COLA's, even when earned benefits are not paid. After application of the COLA, the greater of the increased 40 percent benefit offset by social security or the increased earned benefit is paid until the annuity is redetermined at age 62. After age 62, the redetermined annuity is paid.
(f) COLA's are payable to retirees and survivors whose annuities commence before the effective date.
(a) The full amounts of COLA's are payable on annuities having a commencing date more than 11 months before the effective date.
(b)(1) Prorated portions of COLA's are payable of annuities having a commencing date within 11 months before the effective date.
(2) Proration is based on the number of months (with any portion of a month counting as a month) between the annuity commencing date and the effective date.
(3) For survivors of deceased retirees, proration is determined by the date the annuity was first payable to the deceased retiree.
(4) Proration applied to the assume social security disability insurance benefit is based on the commencing date of the disability annuity, not the beginning of the social security disability benefit.
(a) COLA's on the basic employee death benefit increase the $15,000 component by the percentage change.
(b) Recipients of the basic employee death benefit are entitled to COLA's if the employee or Member died on or after the effective date.
(a) COLA's on combined CSRS/FERS annuities are computed by increasing the CSRS component by the percentage change and the FERS component by the amount of COLA's under § 841.703(a).
(b) The initial monthly rate is computed by—
(1) Applying CSRS rules to CSRS service to obtain the annual rate of the self-only annuity (as defined in § 831.603 of this chapter) based on the CSRS service; then
(2) Applying FERS rules to FERS service to obtain the annual rate of annuity determined under §§ 842.403, 842.405, 842.406, or 842.407 of this chapter based on the FERS service; then
(3) Making any applicable FERS reductions for age and/or survivor benefits to the amounts computed under paragraphs (b)(1) and (b)(2) of this section; then
(4) Dividing the sum of the reduced amounts computed under paragraph (b)(3) of this section by 12; then
(5) Dropping any cents.
(c) The initial monthly CSRS component is computed by—
(1) Applying CSRS rules to CSRS service to obtain the annual rate of the self-only annuity (as defined in § 831.603 of this chapter) based on the CSRS service; then
(2) Making any applicable FERS reductions for age and/or survivor benefits; then
(3) Dividing the annual amount by 12; then
(4) Dropping any cents.
(d) The initial monthly FERS component is computed by subtracting the initial monthly CSRS component from the initial monthly rate.
(e) A retiree who was covered under FERS for at least one month has a FERS component. If the amount of the FERS component as computed under paragraph (d) of this section is zero (because the CSRS component is equal to the monthly rate, leaving no balance for the FERS component), the FERS component is $1 per month. The retiree is due a full dollar increase on the FERS component with the next COLA. An employee with less than a month of FERS service has no FERS component and is not due any FERS COLA's.
(f) COLA's are determined by applying the appropriate increase to each component and rounding to the next lower dollar (each component must increase by at least one dollar if a COLA applies to each component) before adding them together for the new monthly amount payable.
For purposes of computing the assumed CSRS annunity under § 843.308 of this chapter, the assumed CSRS annuity includes COLA's computed under CSRS rules.
(a) Military reserve technicians who retire as a result of a medical disability are excepted from the bar against COLA increases for retirees under age 62.
(b) Military reserve technicians have retired as a result of a medical disability if they retire under—
(1) Section 8451(a)(1)(B) of title 5, United States Code (allowing retirement by military reserve technicians who are medically disabled for their positions); or
(2) Section 8456 of title 5, United States Code (allowing retirement by military reserve technicians who are not disabled for their positions and who are not eligible under the special military technician discontinued service provisions (section 8414(c)) but who are medically disqualified for military service or the rank required to hold their positions).
(c)(1) Military reserve technicians have not retired as a result of a medical disability if they retire under section 8414(c) of title 5, United States Code (allowing retirement by military reserve technicians who may not be disabled for their positions, but are medically or nonmedically disqualified for military service or the rank required to hold the position, and who are at least age 50 with 25 years of service), unless they provide OPM official documentation showing that their disqualification was for medical reasons.
(2) When OPM receives no information about the reason for the disqualification of a military reserve technician retiring under section 8414(c) of title 5, United States Code, OPM will process the case assuming that the disqualification was for nonmedical reasons. OPM will inform these retirees that they will not receive COLA's until they reach age 62 unless they provide an official certification from the military showing that their disqualification was for medical reasons.
This subpart regulates the statutory provision on waiver of annuity benefits under the Federal Employees’ Retirement System.
As used in this subpart—
(a) An annuitant may decline to accept all or any part of the amount of his or her annuity by a waiver signed and filed with the Office of Personnel Management (OPM).
(b) A waiver is effective the first day of the month following the month in which it is received in OPM, unless a later effective date is specified by the annuitant.
(c) A waiver remains in effect until revoked or changed by the annuitant in writing, except as provided in paragraph (f) of this section. The effective date of a revocation or change will be the first day of the month following the month in which the request to revoke or change is received in OPM, unless a later date is specified by the annuitant.
(d) The amount of annuity that is waived is forfeited during the period the waiver is in effect and cannot be recovered.
(e) An annuity which has a waiver in effect will not be increased by cost-of-living adjustments (COLA) authorized under 5 U.S.C. 8462. Upon cancellation of a waiver, the rate of annuity will be increased by any COLA authorized during the period a waiver was in effect.
(f) Upon the death of an annuitant with a waiver in effect, any survivor annuity payable will be authorized at the full rate of annuity as though the waiver had not been in effect, unless the survivor annuitant executes a waiver.
The effect of a qualifying court order on a waiver is controlled by § 838.111(c) of this chapter.
This subpart regulates state income tax withholding from payments of basic benefits under the Federal Employees Retirement System (FERS).
For the purpose of this subchapter:
OPM will enter into an agreement with any State within 120 days of an application for agreement from the proper State official. The terms of the standard agreement will be §§ 841.1004 through 841.1007 of this subpart. OPM and the State may agree to additional terms and provisions, insofar as those additional terms and provisions do not contradict or otherwise limit the terms of the standard agreement.
OPM will, in performance of this agreement:
(a) Process the magnetic tape containing State tax transactions against the annuity roll once a month at the time monthly recurring payments are prepared for the United States Treasury Department. Errors that are identified will not be processed into the file, and will be identified and returned to the State for resolution via the monthly error report. Collections of State income tax will continue in effect until the State requesting the initial action supplies either a valid revocation or change. The magnetic tape must be received 35 days prior to the date of the check in which the transactions are to be effective. For example, withholding transactions for the July 1 check must be received 5 days prior to June 1. If the magnetic tape submitted by the State cannot be read, OPM will notify the State of this fact, and if a satisfactory replacement can be supplied in time for monthly processing, it will be processed.
(b) Deduct from the regular, recurring annuity payments of an annuitant the amount he or she has so requested to be withheld, provided that:
(1) The amount of the request is an even dollar amount, not less than Five Dollars nor more than the net recurring amount. The State may set any even dollar amount above Five Dollars as a minimum withholding amount.
(2) The annuitant has not designated more than one other State for withholding purposes within the calendar year. The State can set any limit on the number of changes an annuitant may make in the amount to be withheld.
(c) Retain the amounts withheld in the Fund until payment is due.
(d) Pay the net withholding to the State on the last day of the first month following each calendar quarter.
(e) Make the following reports:
(1) A monthly report which will include all the State tax withholdings, cancellations and adjustments for the month, and also each request OPM was not able to process, with an explanation, in coded format, of the reason for rejection.
(2) A quarterly report which will include State, State address, quarterly withholdings, quarterly cancellations and adjustments, quarterly net
(3) An annual summary report which contains the name, Social Security identification number, and total amount withheld from non-cancelled payments during the previous calendar year, for each annuitant who requested tax withholding payable to the State. In the event the annuitant had State income tax withholding in effect for more than one State in that calendar year, the report will show only the amount withheld for the State receiving the report.
(4) An annual report to each annuitant for whom State income taxes were withheld giving the amount of withholding paid to the State during the calendar year.
The State will, in performance of this agreement:
(a) Accept requests and revocations from annuitants who have designated that State income tax deductions will go to the State.
(b) Convert these requests on a monthly basis to a machine-readable magnetic tape using specifications received from OPM, and forward that tape to OPM for processing.
(c) Inform annuitants whose tax requests are rejected by OPM that the request was so rejected and of the reason why it was so rejected.
(d) Recognize that, to the extent not prohibited by State laws, records maintained by the State relating to this program are considered jointly maintained by OPM and are subject to the Privacy Act of 1974 (5 U.S.C. 552a). Accordingly, the States will maintain such records in accordance with that statute and OPM's implementing regulations at 5 CFR part 297.
(e) Respond to requests of annuitants for information and advice in regard to State income tax withholding.
(f) Credit the amounts withheld from FERS annuities to the State tax liability of the respective annuitants, and, subject to applicable provisions of State law to the contrary, refund any balance over and above that liability to the annuitant, unless he or she should request otherwise.
(g) Surrender all tax withholding requests to OPM when this agreement is terminated or when the documents are not otherwise needed for this State tax withholding program.
(h) Allow OPM, the Comptroller General or any of their duly authorized representatives access to, and the right to examine, all records, books, papers or documents related to the processing of requests for State income tax withholding from FERS annuities.
These additional provisions are also binding on the State and OPM:
(a) A request or revocation is effective when processed by OPM. OPM will process each request by the first day of the second month following the month in which it is received, but incurs no liability or indebtedness by its failure to do so.
(b) Any amount deducted from an annuity payment and paid to the State as a result of a request is deemed properly paid, unless the annuity payment itself is cancelled.
(c) OPM will provide the State with the information necessary to properly process a request for State income tax withholding.
(d) If the State is paid withholding which is contrary to the terms of the annuitant's request, the State is liable to the annuitant for the amount improperly withheld, and subject to account verification from OPM, agrees to pay that amount to the annuitant on demand.
(e) In the case of a dispute amount in any of the reports described and authorized by this agreement, the Associate Director will issue an accounting.
(f) If a State received an overpayment of monies properly belonging to the Fund, OPM will offset the overpayment from a future payment due the State. If there are no further payments due the State, OPM will inform the State in writing of the amount due. Within 60 days of the date of receipt of that communication that State will make payment of the amount due.
This agreement may be modified or terminated in the following manner:
(a) Either party may suggest a modification of non-regulatory provisions of the agreement in writing to the other party. The other party must accept or reject the modification within 60 calendar days of the date of the suggestion.
(b) The agreement may be terminated by either party on 60 calendar days written notice.
(c) OPM may modify this agreement unilaterally through the rule making process described in sections 553, 1103, and 1105 of title 5, United States Code.