United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency 

Benefits Administration Letter 

Number 10 - 103 Date: April 16, 2010

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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 2010. 

Cost-of-Living Adjustments

There is no COLA payable in 2010. 

Increase in Children's Benefits 

Since there is no COLA change for 2010 the children’s rate remains the same as the rates 

were in 2009. 

 

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

benefit payable to that child is the lesser of: 

$469 per month per child; or 

$1409 per month divided by the number of eligible children (if over 3). 

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

benefit payable to that child is the lesser of: 

$563 per month per child; or 

$1691 per month divided by the number of eligible children. 

FERS Basic Employee Death Benefit 

Since there is no change in the COLA, the basic employee death benefit for an employee 

who dies on or after December 1, 2009, and before December 1, 2010, remains 

unchanged from last year, $29,722.95. 
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Interest Rate for Service Credit Payments, Refunds, and Voluntary Contributions 

The interest rate that applies to both CSRS and FERS is 3.125% in 2010. 

 

Salary Cap 

Sometimes officials in certain Executive level positions do not receive the full official 

salary of their positions because of a cap on the amount that can be paid to them. These 

officials pay retirement deductions on the capped amount, rather than the full amount, 

and we compute retirement benefits using the capped amount. Additional information on 

this can be viewed on our website at http://www.opm.gov/oca/pay/HTML/10GSCap.asp. 

Reminder Regarding Military Deposits 

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

the new 2010 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. 

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 Retirement Pay 

London, KY 40742-7130 
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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

The Present value factors were revised on October 1, 2007, and can be found in the 

June 7, 2007 Federal Register, Volume 72, Number 109. 

CSRS factors can be accessed at http://edocket.access.gpo.gov/2007/E7-11085.htm

and FERS factors can be accessed at http://edocket.access.gpo.gov/2007/E7-11083.htm. 

OPM uses present value factors to compute reductions to: 

 CSRS and FERS retiree’s benefits when the retiree elects the Alternative Form of 

Annuity; 

 CSRS and FERS benefits with a CSRS component when the retiree elects to 

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

deposit owed for the service 

 CSRS and FERS benefits when the retiree marries after retirement and elects to 

provide a survivor annuity benefit; 

 Retiree’s benefits when the retiree elects to credit Nonappropriated Fund 

Instrumentality (NAF) 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. 

Significant Social Security Figures for 2010 

On October 15, 2009, the Social Security Administration published a Fact Sheet that 

listed 2010 figures that are significant for retirement matters. You can find that Fact 

Sheet on the Social Security Administration's Internet site, at 

www.ssa.gov/pressoffice/factsheets/colafacts.htm. We have included some of the figures 

here for your convenience. 

Social Security Maximum Wage Base

The Social Security maximum taxable wage remains unchanged from 2009 and is 

$106,800. 

Average Total Wages
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The amount of average total wages for 2008 is $41,334.97 

Bend Points

The dollar amounts, or bend points, used in the benefit formula for workers who become 

eligible for benefits in 2008, and in the formula for computing maximum individual 

benefits for 2010, are $761 and $4586. 

 

FERS Retiree Annuity Supplement Earnings Limit

The Social Security earnings limitation for 2010 remains unchanged from 2009 and is 

$14,160. Any FERS annuitant who is receiving a FERS annuity supplement (unless he or 

she is under age 55 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 2010 by 

$1.00 for every $2.00 over this amount earned in 2010. 

 

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. 

When an individual reaches the full retirement age, the exempt amount is $37,680 per 

year. This amount applies only to earnings for months prior to attaining full retirement 

age. One dollar in benefits will be withheld for every $3 in earnings above the limit. 

There is no limit on earnings beginning the month an individual attains full retirement 

age. For additional information go to www.ssa.gov and review the fact sheet that relates 

to 2010 Social Security changes. 

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 remains unchanged at 

$16,500 for tax year 2010. For purposes of the TSP, the term "elective deferrals" means 

the maximum amount that employees can contribute to their thrift accounts. You can find 

additional information on the elective deferral limit on the TSP web site at www.tsp.gov. 

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

the Internal Revenue Code’s elective deferral limit. 

The catch-up contributions have their own annual limit and eligibility criteria. The limit 

remains unchanged and is $5,500 for 2010. Additional information is available in TSP 

Bulletin 09-11 which can be accessed at www.tsp.gov. 

Kathleen M. McGettigan (Acting) 

Associate Director 

 for Retirement and Benefits