United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter 

Number: 04-306 Date: August 16, 2004 

Subject: Fiscal Year 2004 Factors for Calculating Imputed Costs

This Letter provides the fiscal year (FY) 2004 cost factors for the Federal civilian benefit 

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

“pensions” (the Civil Service Retirement and Federal Employees’ Retirement Systems), the 

Federal Employees Health Benefits Program and the Federal Employees Group Life Insurance 

Program. 

Benefit 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/asd/htm/bal03.asp. 

COST FACTORS 

Pensions. For most Civil Service Retirement System (CSRS) covered employees, the FY 2004 

cost factor will be 25.0 percent of basic pay, the same as for FY 2003. The FY 2004 cost factors 

for all categories of CSRS coverage are attached and unchanged from FY 2003. 

For most Federal Employees Retirement System (FERS) covered employees, the FY 2004 cost 

factor will be 12.0 percent, also the same as for FY 2003. The cost factors for all categories of 

FERS coverage are attached and unchanged from FY 2003. 

Federal Employees Health Benefits Program. For FY 2004, the cost factor is $4,419 per 

enrolled employee: 

Quarter Factor

1st

 $1,077

2nd 1,096

3rd 1,114

4th 1,133

FY 2004 $4,420

Federal Employees Group Life Insurance Program. The FY 2004 cost factor for the Federal 
Employees Group Life Insurance Program (FEGLI) is 0.02 percent of basic pay, the same as in 

previous years. 

ASSURANCE FOR AUDITORS 

The cost factors provided in this letter are being issued before they can be opined upon by 

OPM’s independent public accounting firm. Nonetheless, the FY 2003 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 2003 financial statements; these 

statements received an unqualified opinion. The policies, procedures and controls pertaining to 

the calculations of the cost factors did not change from FY 2003. In addition, the Pension and 

Life Program cost factors were unchanged from FY 2003. Consequently, auditors of FY 2004 

financial statements can rely upon the disclosures in OPM’s FY 2003 financial statements and 

the audit opinion thereon. 

INQUIRIES 

If you have any questions regarding this information, we would prefer that 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 A. Yuran, Manager 

 Financial Policy Group 

 Center for Financial Services 

2
Attachment 

2004 COST FACTORS FOR THE CSRS AND FERS 

CSRS 

CATEGORY COST FACTOR (%) 

Regular 25.0

Regular Offset 19.5 

Law Enforcement Officers 40.3 

Law Enforcement Officers - Offset 35.7 

Air Traffic Controllers 33.5 

Air traffic Controllers – Offset 28.7 

Members of Congress 28.4 

Members of Congress – Offset 26.1 

Congressional Employees 33.9 

Congressional Employees – Offset 28.7

FERS 

CATEGORY COST FACTOR (%) 

Regular 12.0

Law Enforcement Officers 25.1 

Air Traffic Controllers 24.4 

Members of Congress 17.7 

Congressional Employees 17.9 

Military Reserve Technicians 14.7 

3