United States

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter

Number 2020 -101 Date: 11/15/2019

Subject: Annual Changes 

Background 

Each year, we publish a Benefits Administration Letter (BAL) with updated information 

that changes annually, such as interest rates and cost-of-living adjustments. This BAL 

contains the figures for 2020. 

Cost-of-Living Adjustments

Many people who receive monthly payments from the Civil Service Retirement System 

(CSRS) or the Federal Employees Retirement System (FERS) will receive a cost-ofliving adjustment (COLA) effective December 1, 2019. The increase is paid in their 

January 2020 annuity payment. The maximum increase is 1.6% for CSRS. All CSRS 

annuitants who have been retired at least 1 year will receive the full COLA, or maximum 

increase. The maximum increase is 1.6% for FERS.

NOTE: The minimum COLA increase is $1.00. Even if the full COLA rate of 1.6% or a 

prorated COLA would result in the annuity rate not increasing, $1.00 is still added to 

the monthly rate. 

All eligible annuitants who have been retired at least 1 year will receive the full COLA, 

or maximum increase. FERS COLAs apply to the retiree’s basic annuity only (not the 

annuity supplement). For survivor annuitants, the COLA applies to both the basic 

survivor annuity and supplementary annuity. In addition, FERS COLAs generally do not 

apply to annuitants who are under age 62 as of December 1, 2019; exceptions are noted 

in title 5. CSRS COLAs apply to all annuities, regardless of the age of the annuitant.

Pro-rated COLAs are payable on annuities having a commencing date from December 1, 

2018, through November 30, 2019. The CSRS and FERS COLAs are payable on 

annuities with commencing dates no later than November 30, 2019. The proration is 

based on the number of months between the annuity commencing date and the effective 

date. 

Annuitants will receive one-twelfth of the applicable increase for each month they 

received an annuity. For survivor annuitants (other than children) of deceased annuitants, 
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the proration is determined by the date the annuity was first payable to the deceased. For 

survivors of deceased employees, the proration is determined by the commencing date of the 

survivor annuity. COLAs on children’s annuities are never pro-rated. The following table 

shows the prorated percentage increase according to the month in which the annuity 

began.

PRORATED CSRS and FERS COLAs EFFECTIVE 12/1/2019

Monthly Annuity Began

Amount of Percentage Increase

CSRS FERS

December 2018 or earlier 1.6% 1.6% 

January 2019 1.5% 1.5% 

February 2019 1.3% 1.3% 

March 2019 1.2% 1.2% 

April 2019 1.1% 1.1% 

May 2019 0.9% 0.9% 

June 2019 0.8% 0.8% 

July 2019 0.7% 0.7% 

August 2019 0.5% 0.5% 

September 2019 0.4% 0.4% 

October 2019 0.3% 0.3% 

November 2019 0.1% 0.1% 

Increase in Children's Benefits

CSRS COLA rates apply to children’s benefits regardless of whether the child’s parent 

was under CSRS or FERS. However, children’s benefits under FERS are offset by 

benefits payable under Title II of the Social Security Act for all children of the deceased. 

In most cases, the Social Security benefit exceeds the FERS benefit which results in no 

FERS benefit being paid. The following rates apply from December 1, 2019 through 

November 30, 2020. 

When the child has a living parent who was married to the deceased employee or retiree, 

the benefit payable to that child is the lesser of: 

• $545 per month per child; or

• $1,637 per month divided by the number of eligible children (if over 3).

When the child has no living parent who was married to the deceased employee or 

retiree, the benefit payable to that child is the lesser of: 
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• $655 per month per child; or

• $1,965 per month divided by the number of eligible children (if over 3).

FERS Basic Employee Death Benefit 

The $15,000 portion of the FERS Basic Employee Death Benefit is adjusted by the CSRS 

COLA. The CSRS COLA, effective December 1, 2019, increases the Basic Employee 

Death Benefit for an employee who dies on or after December 1, 2019 and before 

December 1, 2020, to half of his/her final annual pay (or average pay, if higher), plus 

$34,542.01. Chapter 70 of the CSRS and FERS Handbook has detailed information on 

the Basic Employee Death Benefit (BEDB). 

The surviving spouse must elect whether to receive the BEDB in one payment or in 36 

monthly installments. The current factor used to determine the monthly installment is 

.0299522. Additional information on this can be found at 

http://www.gpo.gov/fdsys/pkg/FR-2014-11-07/pdf/2014-26469.pdf in the November 7, 

2014 Federal Register.

Interest Rate for Service Credit Payments, Refunds, and Voluntary Contributions

The interest rate that applies to both CSRS and FERS for 2020 is 2.25%. 

Salary Cap 

Employees who are subject to a salary cap pay retirement deductions on the capped 

amount and the capped amount is used to compute an employee’s high-3 average pay. 

The salary information on the SF-50, Notification of Personnel Action, should reflect the 

capped amount and not the salary that would have been payable without the cap. 

Reminder Regarding Military Deposits

Use the table below to compute military deposits for service during those years and for 

the 2020 rates. Chapter 23 of the CSRS and FERS Handbook has detailed information on 

Service Credit Payments for Post-56 Military Deposits and BAL 03-105 provides an 

explanation of the alternative method for employees under the Uniformed Services 

Employment Reemployment Rights Act (USERRA).

Employees who want to pay deposits for military service they performed during any of 

these years need to request that the military pay center provide year-by-year earnings so 

that you can compute deposits correctly. 
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Military Deposits

1999 2000 Other Years

CSRS 7.25% 7.40% 7.00% 

FERS 3.25% 3.40% 3.00% 

This is a reminder that all military deposits have to be paid in full to the employing

agency prior to the employee’s separation for retirement. 

Reminder Regarding Waiver of Military Retired Pay 

Employees requesting to waive military retired pay should submit their request directly to

the Defense Finance and Accounting Service at the following address 30 days before 

their planned retirement date to avoid delay in the finalization of their retirement. A copy 

of this request must be attached to the retirement application: 

Defense Finance and

Accounting Service 

U.S. Military Retired Pay

8899 E 56th Street

Indianapolis, IN 46249-1200 

Phone: 1-800-321-1080 

Fax: 1-800-469-6559 

Chapter 22 of the CSRS and FERS Handbook (Chapter 22, Section 22 A4.1-2) contains 

information that must be provided and sample wording that can be used. 

Present Value Factors

There has been no change to the present value factors for 2020. 

The last revision for the present value factors went into effect on October 1, 2015 and 

were published in the Federal Register, volume 80, No. 64 on April 3, 2015. 

CSRS factors can be accessed at 

https://www.gpo.gov/fdsys/pkg/FR-2015-04-03/pdf/2015-07677.pdf

FERS factors can be accessed at 

http://www.gpo.gov/fdsys/pkg/FR-2015-04-03/pdf/2015-07694.pdf. 

OPM uses present value factors to compute reductions to:

• CSRS and FERS retirees’ benefits when the retiree elects the Alternative Form of

Annuity;
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• CSRS and FERS benefits with a CSRS component when the retirees elect to

credit refunded service that ended before March 1, 1991, without paying the

deposit owed for the service;

• CSRS and FERS benefits when the retirees marry after retirement and elect to

provide survivor annuity benefits;

• Retirees’ benefits when the retirees elect to credit Non-Appropriated Fund

Instrumentality (NAFI) service for retirement purposes under Public Law 104-106

or Public Law 107-107; and,

• Retirement benefits for individuals with certain types of retirement coverage

errors who can receive credit for service by taking an actuarial reduction under

the provisions of the Federal Erroneous Retirement Coverage Correction Act.

OPM uses discount factors to compute the reduction to annuity benefits when retirees 

elect to credit their NAFI service. 

Significant Social Security Figures for 2020 

November 2019, the Social Security Administration published a Fact Sheet that listed 

2020 figures that are significant for retirement matters. You can find that Fact Sheet on 

the Social Security Administration's Internet site, at

https://www.ssa.gov/news/press/factsheets/colafacts2020.pdf. We have included some of 

the figures here for your convenience. 

Social Security Maximum Taxable Earnings: The Social Security maximum taxable 

earnings for 2020 is $137,700. 

Bend Points: The dollar amounts, or bend points, used in the benefit formula for workers 

who become eligible for benefits in 2020, and in the formula for computing maximum 

individual benefits for 2020, are $960 and $5,785. Information on the benefit formula 

Bend points may be found by clicking this link: 

https://www.ssa.gov/OACT/COLA/bendpoints.html 

FERS Retiree Annuity Supplement Earnings Limit

The Social Security earnings limitation is $18,240 a year for 2020. Any FERS annuitant 

who is receiving a FERS annuity supplement (unless he or she is under the minimum 

retirement age and retired under one of the special provisions for law enforcement 

officers, firefighters, air traffic controllers, or military reserve technicians separated for 

loss of military membership) will have his or her annuity supplement offset in 2020 by 

$1.00 for every $2.00 over this amount earned in 2020. For more information: 

https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/index.html
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Increase in Age for Full Social Security Benefits

Legislation passed in 1983 provided that the age for receiving full Social Security benefits 

will gradually increase from 65 to 67. The first increase took effect in January 2001. It 

affects workers born in 1938 or later. More information on this change is available on Social 

Security's web site at www.ssa.gov. 

Note: This change does not affect the entitlement of any person who is age 62 to receive 

reduced benefits if he or she has sufficient Social Security credits to receive a benefit. 

 Thrift Savings Plan (TSP) Deferral Limit

The Internal Revenue Service annual limit on elective deferrals increases to $19,500 for tax 

year 2020. For purposes of the TSP, the term "elective deferrals" means the maximum 

amount that employees can contribute to their thrift accounts. 

In addition, TSP participants that are age 50 or over can make tax-deferred “catch-up” 

contributions from their basic pay to their TSP accounts. These contributions are a 

supplement to the participant’s regular employee contributions and do not count against the 

Internal Revenue Code’s elective deferral limit. Additional information is available at: 

https://www.tsp.gov/PDF/formspubs/tspfs07.pdf. The catch-up contributions have their own 

annual limit and eligibility criteria. The limit remains is $6,500 for 2020. Additional 

information is available at: 

https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/contributionLimits.html. 

Kenneth J. Zawodny, Jr.

Associate Director 

Retirement Services 

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