United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter

 

Number: 12-307 Date: June 2012

Subject: Fiscal Year 2012 Cost Factors for Calculating Imputed Costs 

This Letter provides the fiscal year (FY) 2012 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 System (FERS), 

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

Life Insurance Program (FEGLI). The imputed costs are used to determine the actuarial liabilities 

which are included in Governmental financial statements. 

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

instructions for the computation and accounting for imputed costs related to the Federal civilian 

benefit programs; see http://www.opm.gov/retire/pubs/bals/2003/03-309.pdf for more information. 

COST FACTORS 

Pensions. The economic assumptions used to calculate the FY 2012 cost factors under Statement of 

Federal Financial Accounting Standards (SFFAS) 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 are based on 10-year historical averages. These 

economic assumptions differ from those established by OPM under guidance from the CSRS Board 

of Actuaries for the determination of certain statutory funding payments for CSRS and FERS. 

For most CSRS-covered employees, the FY 2012 cost factor is 29.8 percent of basic pay. The 

FY 2012 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. 

The FY 2012 cost factors reported in this BAL also differ from the normal cost percentages used to 

determine the employer contributions agencies pay for FERS employees. For most FERS-covered 

employees, the FY 2012 cost factor is 13.7 percent of basic pay. The cost factors for all categories of 

FERS coverage are attached. Since the cost factors reported under SFFAS 33 are determined on a 

different basis than are the actual FERS normal cost contributions, agencies should expect to continue 

to report future imputed retirement costs for their FERS employees. 
FEHB Program. For FY 2012, the cost factor is $5,817 per enrolled employee. Please note that 

the cost factors shown below are based on the actuarial assumptions required by SFFAS 33, as 

calculated by the FEHB actuary.

Quarter Factor

1

st $1,425

2

nd 1,444

3

rd 1,464

4

th 1,484

FY 2012 $5,817

FEGLI Program. The FY 2012 cost factor for the FEGLI is 0.02 percent of basic pay, the same 

as in previous years. 

STATEMENT FOR AUDITORS 

The FY 2012 cost factors provided in this letter are being issued before an opinion by OPM’s 

independent public accounting firm can be received for FY 2012. Nonetheless, the FY 2011 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 2011 financial 

statements. These statements received an unqualified audit opinion. The policies, procedures and 

controls pertaining to the calculations of the FY 2012 cost factors did not change from FY 2011. 

Consequently, auditors of FY 2012 financial statements can rely upon the disclosures in OPM’s 

FY 2011 financial statements and the related audit opinion. 

INQUIRIES 

If you have any questions regarding this information, feel free to email us at 

FinancialBALs@opm.gov. You may also phone us at (202) 606-0606.

 Emily Dean

 Associate Chief Financial Officer 

 Financial Services 

Attachment 

 
 Attachment 

2012 COST FACTORS FOR THE CSRS AND FERS 

CSRS

CATEGORY COST FACTOR (%)

Regular 29.8

Regular Offset 23.2

Law Enforcement Officers 50.9

Law Enforcement Officers - Offset 45.2

Air Traffic Controllers 46.3

Air Traffic Controllers – Offset 41.0

Members of Congress 33.3

Members of Congress – Offset 31.0

Congressional Employees 41.1

Congressional Employees – Offset 35.7

FERS

CATEGORY COST FACTOR (%)

Regular 13.7

Law Enforcement Officers 29.7

Air Traffic Controllers 29.4

Members of Congress 20.8

Congressional Employees 19.4

Military Reserve Technicians 16.9