United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter 

Number: 10-306 Date: August, 2010 

Subject: Fiscal Year 2010 Factors for Calculating Imputed Costs

This Letter provides the fiscal year (FY) 2010 cost factors for the Federal civilian benefit 

programs. Agencies will use these factors to calculate their imputed costs relating to the Civil 

Service Retirement System (CSRS), the Federal Employees Retirement Systems, the Federal 

Employees Health Benefits Program (FEHB) and the Federal Employees’ Group Life Insurance 

Program (FEGLI) which are used to determine the actuarial liabilities which are included in 

Governmental financial statements. Beginning in FY 2010, with the implementation of SFFAS 

33 Statement of Federal Financial Accounting Standards 33 Pensions, Other Retirement 

Benefits, and Other Postemployment Benefits: Reporting the Gains and Losses from Changes in 

Assumptions and Selecting Discount Rates and Valuation Dates (SFFAS 33), there are 

significant changes to the actuarial assumptions for the benefit programs. 

Benefits Administration Letter 03-309, dated September 15, 2003, provides detailed 

instructions for the computation and accounting for these imputed costs; see 

http://www.opm.gov/retire/pubs/bals/2003/03-309.pdf. 

COST FACTORS 

Pensions. SFFAS 33 requires a change to the long term economic assumptions used in the reporting 

of actuarial liabilities for CSRS and FERS. In addition, the Defense Authorization Act for Fiscal 

Year 2010 included provisions to provide credit under FERS for unused sick leave balances at 

retirement, and to allow for redeposit of refunded FERS contributions for employees returning to 

federal service. OPM’s actuary has applied these changes to derive the cost factors for the CSRS and 

the FERS. These retirement cost factors should be applied with the FY 2010 year end financial 

reporting. These new cost factors are determined under SFFAS 33 and differ from the normal cost 

percentages used to determine the employer contributions agencies pay for FERS employees. 

We note that there will be an increase in employer contributions that agencies pay for FERS 

employees beginning in FY 2011 – please see BAL 10-304 for details. However, agencies should 

expect to continue to report future imputed retirement costs for their FERS employees, as the cost 

factors reported under SFFAS 33 are determined on a different basis than are the actual FERS 

normal cost contributions. 

For most CSRS-covered employees, the FY 2010 cost factor is 30.1 percent of basic pay. The 
FY 2010 cost factors for all categories of CSRS coverage are attached. While agency payments 

under CSRS are not affected by the CSRS normal cost percentages for the vast majority of 

agencies, the CSRS normal cost percentages determined under SFFAS 33 are used to determine 

the actuarial liabilities which are included in Governmental financial statements. 

For most FERS-covered employees, the FY 2010 cost factor is 13.8 percent of basic pay. Due 

to the change in actuarial assumptions required with the FY 2010 implementation of SFFAS 33, 

agencies will need to calculate an imputed cost for FERS. The cost factors for all categories 

of FERS coverage are attached. 

FEHB Program. For FY 2010, the cost factor is $5,906 per enrolled employee. Please note that 

the cost factors shown below are based on the new actuarial assumptions required with the 

implementation of SFFAS 33. 

. 

Quarter Factor 

1st

 $1,437

2nd 1,463

3rd 1,489

4th 1,517

FY 2010 $5,906

FEGLI Program. The FY 2010 cost factor for the FEGLI is 0.02 percent of basic pay, the same 

as in previous years. 

STATEMENT FOR AUDITORS 

The cost factors provided in this letter are being issued before an opinion by OPM’s independent 

public accounting firm can be received. Nonetheless, the FY 2009 cost factors for “regular” 

CSRS and FERS coverage, as well as those for the FEHB and FEGLI Programs were disclosed 

in the footnotes accompanying OPM’s consolidated FY 2009 financial statements; these 

statements received an unqualified audit opinion. Although the actuarial assumptions for the 

benefit programs have changed for FY 2010, with the implementation of SFFAS 33, the overall 

processes, procedures, and controls pertaining to the calculations of the cost factors did not 

change from FY 2009. 
INQUIRIES 

If you have any questions regarding this information, we would prefer you email us at 

finance@opm.gov, so we have a record of our communication. You may also phone us 

on (202) 606-0606. 

 

 Robert D. Wurster 

 Acting Associate Chief Financial Officer 

 Financial Services 

Attachment 

 Attachment
2010 COST FACTORS FOR THE CSRS AND FERS 

CSRS 

CATEGORY COST FACTOR (%) 

Regular 30.1 

Regular Offset 23.5 

Law Enforcement Officers 51.1 

Law Enforcement Officers - Offset 45.6 

Air Traffic Controllers 46.6 

Air Traffic Controllers – Offset 41.4 

Members of Congress 33.4 

Members of Congress – Offset 31.2 

Congressional Employees 41.3 

Congressional Employees – Offset 35.9

FERS 

CATEGORY COST FACTOR (%) 

Regular 13.8 

Law Enforcement Officers 29.8 

Air Traffic Controllers 29.6 

Members of Congress 20.9 

Congressional Employees 19.6 

Military Reserve Technicians 17.0