This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

49277 

Vol. 82, No. 205 

Wednesday, October 25, 2017 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Parts 831, 839, 841, 842, and 847 

RIN 3206–AN22 

Federal Employees’ Retirement 

System; Government Costs 

AGENCY: Office of Personnel 

Management. 

ACTION: Final rule. 

SUMMARY: The Office of Personnel 

Management amends this rule to clarify 

the manner OPM uses for determining a 

supplemental liability under the Federal 

Employees’ Retirement System (FERS), 

and to clarify the process by which the 

U.S. Postal Service (USPS) and the U.S. 

Department of the Treasury (Treasury) 

may request reconsideration of OPM’s 

valuation of the supplemental liability. 

The rule also clarifies the employee 

categories OPM uses to compute the 

FERS normal cost percentages. The rule 

also amends the definitions of actuary, 

present value factor, and actuarial 

present value to ensure these definitions 

are uniform and appropriate. 

DATES: This rule is effective October 25, 

2017. 

FOR FURTHER INFORMATION CONTACT: 

Roxann Johnson, (202) 606–0299 or 

combox@opm.gov. 

SUPPLEMENTARY INFORMATION: OPM’s 

determination of the FERS normal cost 

percentage necessary to fund the Civil 

Service Retirement and Disability Fund 

(CSRDF) is subject to appeal by agencies 

with at least 1,000 employees in the 

general category of employees or 500 

employees in any of the special 

categories of employees. The Secretary 

of the Treasury or the Postmaster 

General may request the Board of 

Actuaries of the Civil Service 

Retirement System (the Board) to 

reconsider the amount determined to be 

payable with respect to any 

supplemental liability in accordance 

with 5 U.S.C. 8423(c) and 5 CFR 

841.409. The regulations at 5 CFR 

841.401 through 5 CFR 841.411 

establish the time limits and 

requirements for an agency appeal of 

OPM’s determination of a normal cost 

percentage. OPM has added regulations 

under 5 CFR part 841 to clarify the 

process by which the Secretary of the 

Treasury and the Postmaster General 

may file a request for the Board to 

reconsider an amount determined to be 

payable to the CSRDF with respect to a 

supplemental liability. 

OPM’s final rule amends its definition 

of ‘‘actuary’’ provided under 5 CFR 

841.402. The prior definition was 

limited to ‘‘an associate or fellow in the 

Society of Actuaries and one who is 

enrolled under section 3042 of Public 

Law 93–406, the Employee Retirement 

Income Security Act of 1974’’ (ERISA). 

Because this definition no longer 

reflected professional standards 

generally required of an actuary for this 

subpart, and was overly narrow because 

it worked to exclude knowledgeable and 

experienced actuaries who may not be 

enrolled under ERISA but who are well 

qualified to issue statements of opinion 

with regard to the CSRDF, OPM has 

amended the definition of ‘‘actuary’’ to 

include those who meet the 

qualification standards to issue a 

statement of actuarial opinion in regard 

to defined benefit retirement plans in 

the United States. 

OPM’s final rule amends its 

regulations under 5 CFR 841.403 to 

make clear that it determines separate 

normal cost percentages for employees 

covered under Federal Employees 

Retirement System (FERS), FERS 

Revised Annuity Employees (FERS– 

RAE), and FERS Further Revised 

Annuity Employees (FERS–FRAE) in 

compliance with section 5001 of the 

‘‘Middle Class Tax Relief and Job 

Creation Act of 2012,’’ Public Law 112– 

96, 126 Stat. 199 (Feb. 22, 2012), and 

section 401 of the ‘‘Bipartisan Budget 

Act of 2013,’’ Public Law 113–67, 127 

Stat. 1165 (Dec. 26, 2013). This 

legislation defined FERS–RAE and 

FERS–FRAE employees for whom 

increased retirement deductions apply, 

which results in increased outlays from 

the CSRDF in refund and lump-sum 

payments of employee contributions. 

For that reason, the normal cost 

percentages for FERS–RAE and FERS– 

FRAE employees are expected to exceed 

the normal cost percentages for other 

FERS employees. The legislation also 

reduced the benefit accrual rates for 

Members and Congressional employees 

(other than Capitol Police) subject to 

FERS–RAE and FERS–FRAE, resulting 

in lower associated normal cost 

percentages. To ensure regulations 

reflect current statutory language, OPM 

has amended 5 CFR 841.403 to clearly 

establish separate normal cost 

percentages for FERS, FERS–RAE and 

FERS–FRAE employees within each 

employee category listed under 5 CFR 

841.403. 

OPM’s final rule amends 5 CFR 

841.403 to make clear that it will 

include members of the Capitol Police 

as ‘‘Congressional Employees’’ for 

purposes of deriving separate normal 

cost percentages for this employee 

group. OPM includes members of the 

Capitol Police with Congressional 

employees when deriving the normal 

cost percentages for this employee 

group because, in part, 5 U.S.C. 2107(4) 

defines ‘‘a member or employee of the 

Capitol Police’’ as ‘‘a Congressional 

employee.’’ The Middle Class Tax Relief 

and Job Creation Act of 2014 eliminated 

for FERS–RAE and FERS–FRAE 

employees the higher annuity accrual 

rates for Congressional employees 

provided under 5 U.S.C. 8415(c) (see 5 

U.S.C. 8415(d)) but did not eliminate 

the higher annuity accrual rates under 5 

U.S.C. 8415(e) for members of the 

Capitol Police subject to FERS–RAE and 

FERS–FRAE. The annuity benefits of 

members of the Capitol Police are more 

closely comparable to another of the 

special employee groups—law 

enforcement officers, whose annuities 

are computed under 5 U.S.C. 8415(e)— 

for the purpose of determining their 

FERS normal cost percentage. However, 

because a member of the Capitol Police 

is not within the FERS definition of 

‘‘law enforcement officer’’ under 5 

U.S.C. 8401(17), members of the Capitol 

Police are not included in the special 

category of ‘‘law enforcement officers’’ 

under 5 U.S.C. 8423(a)(1)(B) and, 

therefore, are not subject to the normal 

cost percentage applicable to that group. 

The only special category listed in 5 

U.S.C. 8423(a)(1)(B) that does apply to 

members of the Capitol Police is 

‘‘Congressional employees.’’ Thus, 

despite the fact that the other 

Congressional employees subject to 

FERS–RAE and FERS–FRAE do not 

receive enhanced annuity accrual rates, 


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49278 Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Rules and Regulations 

OPM must include Capitol Police in the 

Congressional employee normal cost 

percentage calculation under 5 U.S.C. 

8423(a)(1)(B). Therefore, OPM’s final 

rule amends 5 CFR 841.403(b) to reflect 

all Congressional employees including 

members of the Capitol Police in 

determining the FERS, FERS–RAE and 

FERS–FRAE normal cost percentages for 

the ‘‘Congressional Employees’’ 

category. 

OPM’s final rule amends 5 CFR 

841.403 to include U.S. Postal Service 

employees as a separate category for 

which OPM will derive normal cost 

percentages. OPM has determined a 

Government-wide normal cost 

percentage for each category of 

employee, and U.S. Postal Service 

employees have been included in the 

category of either ‘‘all other employees’’ 

or ‘‘law enforcement officer’’ under 5 

CFR 841.403(c) and (g). Because of the 

separate U.S. Postal Service funding 

provisions established under 5 U.S.C. 

8423(b), and as a result of 

recommendations from the Board, 

OPM’s final rule amends its regulations 

to provide for the use of U.S. Postal 

Service-specific assumptions regarding 

demographic factors in the calculation 

of the U.S. Postal Service supplemental 

liability and in the determination of the 

normal cost percentage for U.S. Postal 

Service employees who do not fall 

under the category of ‘‘law enforcement 

officer.’’ OPM’s final rule amends 

regulations at 5 CFR 841.414, which 

will provide specific guidance on the 

calculation of the supplemental 

liability; and OPM’s final rule adds 

employees of the U.S. Postal Service, 

who are not ‘‘law enforcement officers’’ 

under 5 CFR 841.403(c), as a separate 

category for which OPM will derive 

normal cost percentages under 5 CFR 

841.403. OPM’s final rule removes 

references to the term ‘‘Governmentwide normal cost percentage’’ from 5 

CFR part 841 in order to conform with 

the normal cost percentages established 

for various categories of employees as 

provided under this part, and to clarify 

that an agency may appeal a published 

normal cost percentage even if the 

normal cost percentage applies to a 

category of employee that exists 

predominately or exclusively within a 

single agency. 

OPM’s final rule also adds 5 CFR 

841.415 through 841.417 to the 

regulations. These sections establish the 

procedures and requirements for filing a 

request for reconsideration of a 

supplemental liability determination 

filed by the Secretary of the Treasury or 

the Postmaster General. Under 5 CFR 

841.417, and consistent with 

recommendations from the Board, 

OPM’s final rule requires that the 

actuarial analysis submitted with the 

request for reconsideration must 

demonstrate a difference in the 

supplemental liability of at least 2 

percent of the present value of future 

benefits calculated in OPM’s 

computation of the supplemental 

liability. 

Additionally, OPM’s final rule refines 

the definitions of present value factor 

and actuarial present value under 5 CFR 

parts 831, 839, 842, and 847 to ensure 

that these definitions are uniform and 

appropriate. OPM’s final rule clarifies, 

under 5 CFR 831.303, 831.603, 

831.2202, 839.102, 842.602, 842.702, 

and 847.103, that the present value 

factors are computed by using a 

composite of sex-distinct factors based 

upon mortality assumptions for 

annuitant populations. The factors 

reflect an increase in benefit payments 

at an assumed rate of cost-of living 

adjustment, where appropriate. OPM 

removed 5 CFR 847.602, which 

provided a separate description of 

present value factors for purposes of 

subpart F of part 847 in order to include 

a definition of ‘‘present value factor’’ for 

all of part 847, and OPM added 5 CFR 

842.616 to describe when the present 

value factors will be published. OPM’s 

final rule clarifies under 5 CFR 842.602 

and 842.702 that separate present value 

factors apply to FERS annuities that 

receive cost-of-living adjustments before 

the retiree attains age 62 versus 

annuities that do not receive cost-ofliving adjustments before age 62. 

Comments 

OPM received comments on its 

proposed rule from the U.S. Postal 

Service Office of Inspector General 

(OIG) and the U.S. Postal Service 

General Counsel’s Office (OGC). The 

U.S. Postal Service OIG indicated that it 

‘‘support[ed] the Proposed Rule as far as 

it goes,’’ and the U.S. Postal Service 

OGC indicated that OPM’s proposed 

changes were a ‘‘welcomed step,’’ but 

both organizations recommended that 

the rule require not only the use of U.S. 

Postal Service-specific demographic 

factors but also the use of U.S. Postal 

Service-specific economic factors 

related to general salary growth 

assumptions in determining the normal 

costs and the supplemental liability. 

OPM has determined that this change 

is unnecessary. Currently, the 

regulations under 5 CFR 841.405 

provide that the normal cost percentages 

will be based on the economic 

assumptions determined by the Board, 

and OPM’s final rule amends 5 CFR 

841.414 to provide that each 

supplemental liability will be computed 

based on the economic assumptions 

determined by the Board for the most 

recent valuation of FERS. Therefore, 

nothing in the regulations would 

prevent the Board from using general 

salary growth and wage assumptions 

specific to U.S. Postal Service 

employees when, in the Board’s 

judgment, doing so would be 

appropriate. 

OPM disagrees with the U.S. Postal 

Service OGC’s assertion that 5 U.S.C. 

8401(27)(A), 8423(b)(1), and 

8348(h)(1)(A) require OPM to establish 

regulations that direct the Board to 

select general salary growth economic 

assumptions specific to the U.S. Postal 

Service for use in determining the 

normal costs and supplemental 

liabilities. The provisions under 5 

U.S.C. 8401(23), 8401(27)(B)(iv), and 

8348(h)(1)(A) require OPM to determine 

the normal costs and supplemental 

liabilities by applying ‘‘generally 

accepted actuarial principles,’’ and 5 

U.S.C. 8347(f) and 8423(a)(5) require the 

Board to ‘‘furnish its advice and opinion 

on matters referred to it by the Office’’ 

and to make recommendations that ‘‘in 

the Board’s judgment are necessary to 

protect the public interest and maintain 

the System on a sound financial basis.’’ 

The selection of economic assumptions 

used to determine the normal costs or 

the supplemental liability is inherently 

actuarial in nature. OPM finds that 

requiring the use of general salary 

growth economic assumptions specific 

to the U.S. Postal Service for use in 

determining the normal costs and 

supplemental liabilities would 

unnecessarily limit the Board’s 

discretion in making these 

determinations. As a result, OPM 

declines to adopt the U.S. Postal Service 

OGC’s recommendation to require the 

Board to select U.S. Postal Servicespecific economic assumptions for use 

in determining the normal costs and the 

supplemental liability. To the extent the 

U.S. Postal Service would like to submit 

for the Board’s consideration any 

information regarding the actuarial 

merits of selecting U.S. Postal Servicespecific economic assumptions for use 

in determining the normal cost and the 

supplement liability, it may do so in 

accordance with the requirements of 

Board meeting notices. 

The U.S. Postal Service OGC also 

requested that OPM make clear in its 

final rule that, in instances where OPM 

has computed a separate normal cost 

percentage, an agency’s right to appeal 

and submit the evidence necessary to 

support the appeal should be related to 

OPM’s determination of that normal 

cost percentage rather than any 

Government-wide normal cost 


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Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Rules and Regulations 49279 

percentage. OPM agrees, and has 

adopted the Postal Service OGC’s 

recommendation by amending 5 CFR 

841.406, 841.409, 841.410, 841.411, and 

841.412, to make clear the requirements 

for appealing a normal cost percentage 

apply for each category where OPM 

computes a normal cost percentage as 

specified under 5 CFR 841.403. 

Finally, the U.S. Postal Service OGC 

requested that OPM not impose the 2 

percent threshold requirement 

necessary for the Board to sustain a 

request for reconsideration of its 

supplemental liability determinations. 

The amended regulations under 5 CFR 

841.147 provide that the Board cannot 

sustain a request for reconsideration 

unless the difference in the 

supplemental liability amount is at least 

2 percent of the present value of future 

benefits calculated in OPM’s 

computation of the supplemental 

liability. OPM included this threshold 

requirement as a result of a 

recommendation from the Board 

advising OPM that any threshold be set 

as a difference in present value of future 

benefits. OPM’s actuaries tested the 

effect of what might be considered 

substantive changes in the demographic 

assumptions and produced results 

within a range of 0 percent to a decrease 

of 5.9 percent. Therefore, OPM has 

determined that the 2 percent threshold 

provided is a reasonable basis for 

sustaining a request for reconsideration, 

and therefore, OPM declines to adopt 

the U.S. Postal Service OGC’s 

recommendation to eliminate this 

threshold. 

Executive Order 12866, Regulatory 

Review 

This rule has been reviewed by the 

Office of Management and Budget in 

accordance with Executive Order (E.O.) 

12866, as amended by E.O. 13258 and 

E.O. 13422. 

Regulatory Flexibility Act 

I certify that this regulation will not 

have a significant economic impact on 

a substantial number of small entities. 

Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

List of Subjects 

5 CFR Part 831 

Firefighters, Government employees, 

Income taxes, Intergovernmental 

relations, Law enforcement officers, 

Pensions, Reporting and recordkeeping 

requirements, Retirement. 

5 CFR Part 839 

Administrative practice and 

procedure, Claims, Employment taxes, 

Government employees, Pensions, 

Reporting and recordkeeping 

requirements, Retirement, Social 

Security. 

5 CFR Part 841 

Administrative practice and 

procedure, Air traffic controllers, 

Claims, Disability benefits, Firefighters, 

Government employees, Income taxes, 

Intergovernmental relations, Law 

enforcement officers, Pensions, 

Retirement. 

5 CFR Part 842 

Air traffic controllers, Alimony, 

Firefighters, Law enforcement officers, 

Pensions, Retirement. 

5 CFR Part 847 

Administrative practice and 

procedure, Disability benefits, 

Government employees, Pensions, 

Reporting and recordkeeping 

requirements, Retirement. 

U.S. Office of Personnel Management. 

Kathleen M. McGettigan, 

Acting Director. 

For the reasons stated in the 

preamble, the Office of Personnel 

Management amends 5 CFR parts 831, 

839, 841, 842, and 847 as set forth 

below: 

PART 831—RETIREMENT 

■ 1. The authority citation for part 831 

continues to read as follows: 

Authority: 5 U.S.C. 8347; Sec. 831.102 also 

issued under 5 U.S.C. 8334; Sec. 831.106 also 

issued under 5 U.S.C. 552a; Sec. 831.108 also 

issued under 5 U.S.C. 8336(d)(2); Sec. 

831.114 also issued under 5 U.S.C. 

8336(d)(2), and Sec. 1313(b)(5) of Pub. L. 

107–296, 116 Stat. 2135; Sec. 831.201(b)(1) 

also issued under 5 U.S.C. 8347(g); Sec. 

831.201(b)(6) also issued under 5 U.S.C. 

7701(b)(2); Sec. 831.201(g) also issued under 

Secs. 11202(f), 11232(e), and 11246(b) of Pub. 

L. 105–33, 111 Stat. 251; Sec. 831.201(g) also 

issued under Sec. 7(b) and (e) of Pub. L. 105– 

274, 112 Stat. 2419; Sec. 831.201(i) also 

issued under Secs. 3 and 7(c) of Pub. L. 105– 

274, 112 Stat. 2419; Sec. 831.204 also issued 

under Sec. 102(e) of Pub. L. 104–8, 109 Stat. 

102, as amended by Sec. 153 of Pub. L. 104– 

134, 110 Stat. 1321; Sec. 831.205 also issued 

under Sec. 2207 of Pub. L. 106–265, 114 Stat. 

784; Sec. 831.206 also issued under Sec. 

1622(b) of Pub. L. 104–106, 110 Stat. 515; 

Sec. 831.301 also issued under Sec. 2203 of 

Pub. L. 106–265, 114 Stat. 780; Sec. 831.303 

also issued under 5 U.S.C. 8334(d)(2) and 

Sec. 2203 of Pub. L. 106–235, 114 Stat. 780; 

Sec. 831.502 also issued under 5 U.S.C. 8337, 

and Sec. 1(3), E.O. 11228, 3 CFR 1965–1965 

Comp. p. 317; Sec. 831.663 also issued under 

5 U.S.C. 8339(j) and (k)(2); Secs. 831.663 and 

831.664 also issued under Sec. 11004(c)(2) of 

Pub. L. 103–66, 107 Stat. 412; Sec. 831.682 

also issued under Sec. 201(d) of Pub. L. 99– 

251, 100 Stat. 23; Sec. 831.912 also issued 

under Sec. 636 of Appendix C to Pub. L. 106– 

554, 114 Stat. 2763A–164; Subpart P also 

issued under Sec. 535(d) of Title V of 

Division E of Pub. L. 110–161, 121 Stat. 2042; 

Subpart V also issued under 5 U.S.C. 8343a 

and Sec. 6001 of Pub. L. 100–203, 101 Stat. 

1330–275; Sec. 831.2203 also issued under 

Sec. 7001(a)(4) of Pub. L. 101–508, 104 Stat. 

1388–328. 

Subpart A—Administration and 

General Provisions 

■ 2. Add § 831.117 to subpart A to read 

as follows: 

§ 831.117 Computation of the 

supplemental liability. 

(a) OPM will compute each 

supplemental liability of the Fund using 

demographic factors specific to the 

populations for which the supplemental 

liability applies. 

(b) The supplemental liability will be 

computed based on the economic 

assumptions used by the Board of 

Actuaries of the Civil Service 

Retirement System for the most recent 

valuation of the System. 

(c) Each supplemental liability shall 

be rounded to the nearest one hundred 

million dollars. 

Subpart C—Credit for Service 

■ 3. Amend § 831.303 by revising 

paragraphs (c)(3) and (d)(3) to read as 

follows: 

§ 831.303 Civilian service. 

* * * * * 

(c) * * * 

(3) For the purpose of paragraph (b)(2) 

of this section, the term ‘‘present value 

factor’’ has the same meaning as defined 

in § 831.603 and ‘‘time of retirement’’ 

has the same meaning as defined in 

§ 831.2202. 

(d) * * * 

(3) For the purpose of paragraph (d)(2) 

of this section, the term ‘‘present value 


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49280 Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Rules and Regulations 

factor’’ has the same meaning as defined 

in § 831.603 and ‘‘time of retirement’’ 

has the same meaning as defined in 

§ 831.2202. 

Subpart F—Survivor Annuities 

■ 4. Amend § 831.603 by revising the 

definition of ‘‘present value factor’’ to 

read as follows: 

§ 831.603 Definitions. 

* * * * * 

Present value factor means the 

amount of money (earning interest at an 

assumed rate) required at the time of 

annuity commencement to fund an 

annuity that starts at the rate of $1 a 

month and is payable in monthly 

installments for the annuitant’s lifetime 

based on mortality rates for annuitants 

paid from the Civil Service Retirement 

and Disability Fund; and increases each 

year at an assumed rate of cost of living 

adjustment. Assumed rates of interest, 

mortality, and cost-of-living adjustments 

used in computing the present value are 

those used by the Board of Actuaries of 

the Civil Service Retirement System for 

valuation of the System based on 

dynamic assumptions. The present 

value factors are unisex factors obtained 

as a composite of sex-distinct present 

value factors. 

* * * * * 

Subpart V—Alternative Forms of 

Annuities 

■ 5. Amend § 831.2202 by revising the 

definition of ‘‘present value factor’’ to 

read as follows: 

§ 831.2202 Definitions. 

* * * * * 

Present value factor has the same 

meaning in this subpart as defined in 

§ 831.603. 

* * * * * 

PART 839—CORRECTION OF 

RETIREMENT COVERAGE ERRORS 

UNDER THE FEDERAL ERRONEOUS 

RETIREMENT COVERAGE 

CORRECTIONS ACT 

■ 6. The authority citation for part 839 

continues to read as follows: 

Authority: Title II, Pub. L. 106–265, 114 

Stat. 770. 

Subpart A—General Provisions 

■ 7. Amend § 839.102 by revising the 

definition of ‘‘present value factor’’ to 

read as follows: 

§ 839.102 Definitions. 

* * * * * 

Present value factor has the same 

meaning in this subpart as defined in 

§ 831.603. 

* * * * * 

PART 841—FEDERAL EMPLOYEES 

RETIREMENT SYSTEM—GENERAL 

ADMINSTRATION 

■ 8. The authority citation for part 841 

continues to read as follows: 

Authority: 5 U.S.C. 8461; Sec. 841.108 also 

issued under 5 U.S.C. 552a; Secs. 841.110 

and 841.111 also issued under 5 U.S.C. 

8470(a); subpart D also issued under 5 U.S.C. 

8423; Sec. 841.504 also issued under 5 U.S.C. 

8422; Sec. 841.507 also issued under section 

505 of Pub. L. 99–335; subpart J also issued 

under 5 U.S.C. 8469; Sec. 841.506 also issued 

under 5 U.S.C. 7701(b)(2); Sec. 841.508 also 

issued under section 505 of Pub. L. 99–335; 

Sec. 841.604 also issued under Title II, Pub. 

L. 106–265, 114 Stat. 780. 

Subpart D—Government Costs 

■ 9. Amend § 841.401 by revising 

paragraphs (b)(3) and (4) and adding 

paragraph (b)(5) to read as follows: 

§ 841.401 Purpose and scope. 

* * * * * 

(b) * * * 

(3) Agency appeals of rate 

determinations; 

(4) Methodology for determining the 

amount due from each agency; and 

(5) Requests for reconsideration of the 

supplemental liability. 

■ 10. Amend § 841.402 by revising the 

definition of ‘‘actuary’’ to read as 

follows: 

§ 841.402 Definitions. 

* * * * * 

Actuary means a professional who 

meets the qualification standards to 

issue a statement of actuarial opinion in 

regard to defined benefit retirement 

plans in the United States. 

* * * * * 

■ 11. Amend § 841.403 by revising the 

introductory text, paragraph (b), 

paragraph (g), and adding paragraph (h) 

to read as follows: 

§ 841.403 Categories of employees for 

computation of normal cost percentages. 

Separate normal cost percentages for 

FERS, FERS–RAE and FERS–FRAE will 

be determined for each of the following 

groups of employees: 

* * * * * 

(b) Congressional employees, 

including members of the Capitol 

Police; 

* * * * * 

(g) Other employees of the United 

States Postal Service; 

(h) All other employees. 

■ 12. Revise § 841.406(a) to read as 

follows: 

§ 841.406 Determination of normal cost 

percentages. 

(a) OPM will determine the normal 

cost percentages for each category of 

employees. These normal cost 

percentages will be used by all agencies 

that have not been granted a single 

agency rate under § 841.412. 

* * * * * 

■ 13. Revise § 841.407(b)(1) to read as 

follows: 

§ 841.407 Notice of normal cost 

percentage determinations. 

* * * * * 

(b) * * * 

(1) The normal cost percentages and 

any single agency rates for each category 

of employees; 

* * * * * 

■ 14. Revise § 841.409 to read as 

follows: 

§ 841.409 Agency right to appeal normal 

cost percentage. 

(a) An agency with at least 1,000 

employees in the general category of 

employees or 500 employees in any of 

the special categories may appeal to the 

Board the normal cost percentage for 

that category as applied to that agency. 

(b) No appeal will be considered by 

the Board unless the agency files, no 

later than 6 months after the date of 

publication of the notice of normal cost 

percentages under § 841.407, a petition 

for appeal that meets all the 

requirements of § 841.410. 

■ 15. Amend § 841.410 by revising the 

section heading and revising the 

introductory text of paragraph (c) and 

revising paragraph (c)(3) to read as 

follows: 

§ 841.410 Contents of petition for appeal 

of normal cost percentage. 

* * * * * 

(c) The actuarial report must contain 

a detailed actuarial analysis of the 

normal cost of FERS benefits as applied 

to the employees of that agency in the 

category of employees for which the 

agency is appealing. The actuarial report 

must— 

* * * * * 

(3) Specifically address and consider 

each of the demographic factors listed in 

§ 841.404. The appealing agency is 

responsible for developing data relating 

to the first nine demographic factors as 

they relate to the category of agency 

employees for which the appeal is being 

filed. OPM’s demographic factors 

(available from OPM) will be presumed 

to be sufficient and reliable for factors 

10 through 13 unless the appealing 


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Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Rules and Regulations 49281 

agency is able to demonstrate, through 

sufficient and reliable data relating to its 

employees or former employees, the use 

of alternative factors is appropriate. The 

fourteenth factor, administrative 

expenses, will be supplied by OPM. 

* * * * * 

■ 16. Amend § 841.411 by revising the 

section heading and revising paragraph 

(a), (b), and (d)(3) and (4) to read as 

follows: 

§ 841.411 Appeals procedure for normal 

cost percentage. 

(a) The normal cost percentages as 

published under § 841.407 are 

presumed to apply to all agencies. Any 

agency appealing application of a 

published normal cost percentage to any 

category of employees in its workforce 

must demonstrate to the satisfaction of 

the Board that the normal cost 

percentage for that category of 

employees in that agency is sufficiently 

different from the published normal cost 

percentage. 

(b) While an agency has an appeal 

pending, the published normal cost 

percentage continues to apply to that 

agency. 

* * * * * 

(d) * * * 

(3) When all relevant factors are 

considered together, there is a 

demonstrated difference between the 

published normal cost percentage being 

appealed and the normal cost 

percentage for the group at issue; and 

(4) The difference is at least 10 

percent of the published normal cost 

percentage being appealed. 

■ 17. Revise § 841.412(c) to read as 

follows: 

§ 841.412 Rates determined by appeal. 

* * * * * 

(c) A single agency rate may be higher 

or lower than the published normal cost 

percentage and will remain in force for 

not less than 3 years. 

* * * * * 

■ 18. Add § 841.414 to subpart D to read 

as follows: 

§ 841.414 Computation of the 

supplemental liability. 

(a) OPM will compute each 

supplemental liability of the Civil 

Service Retirement and Disability Fund 

using demographic factors consistent 

with those used for the computation of 

the normal cost percentages under 

§ 841.403. 

(b) The supplemental liability will be 

computed based on the economic 

assumptions determined by the Board 

for the most recent valuation of the 

Federal Employees Retirement System. 

(c) Each supplemental liability will be 

rounded to the nearest one hundred 

million dollars. 

■ 19. Add § 841.415 to subpart D to read 

as follows: 

§ 841.415 Right to request reconsideration 

of the supplemental liability. 

(a) The Secretary of the Treasury or 

the Postmaster General may request the 

Board to reconsider a determination of 

the amount payable with respect to any 

supplemental liability. 

(b) No request for reconsideration will 

be considered by the Board unless the 

Secretary of the Treasury or the 

Postmaster General files, no later than 6 

months after the date of receipt of the 

first notice of the amount payable with 

respect to the supplemental liability, a 

request for reconsideration that meets 

all the requirements of § 841.416. 

■ 20. Add § 841.416 to subpart D to read 

as follows: 

§ 841.416 Contents of a request for 

reconsideration of the supplemental 

liability. 

(a) To request reconsideration of the 

amount payable with respect to the 

supplemental liability, the Secretary of 

the Treasury or the Postmaster General 

must file with OPM— 

(1) A signed letter of appeal 

summarizing the basis of the request; 

and 

(2) An actuarial report that contains a 

detailed actuarial analysis of the 

request. 

(b) The actuarial report must— 

(1) Be signed by an actuary; 

(2) Specifically present any data and 

development of assumptions related to 

the request for reconsideration; 

(3) Use each of the demographic 

factors listed in § 841.404; and 

(4) Use the economic assumptions 

under § 841.414(b). When a request is 

based in whole or in part on a pattern 

of merit salary increases, the report may 

include an analysis of the economic 

assumptions concerning salary and 

wage growth to take into account the 

combined effect of merit and general 

wage and salary growth. 

■ 21. Add § 841.417 to subpart D to read 

as follows: 

§ 841.417 Reconsideration of the 

supplemental liability. 

(a) The Board cannot sustain a request 

for reconsideration unless the Board 

finds that— 

(1) The data used in the actuarial 

report required by § 841.416 are 

sufficient and reliable; 

(2) The assumptions used in the 

actuarial report required by § 841.416 

are justified; and 

(3) The difference in the supplemental 

liability amount is at least 2 percent of 

the present value of future benefits 

calculated in OPM’s computation of the 

supplemental liability. 

(b) If the Board sustains a request for 

reconsideration of the supplemental 

liability, OPM will recompute the 

supplemental liability according to the 

economic and demographic 

assumptions recommended by the 

Board. 

PART 842—FEDERAL EMPLOYEES 

RETIREMENT SYSTEM—BASIC 

ANNUITY 

■ 22. The authority citation for part 842 

continues to read as follows: 

Authority: 5 U.S.C. 8461(g); Secs. 842.104 

and 842.106 also issued under 5 U.S.C. 

8461(n); Sec. 842.104 also issued under Secs. 

3 and 7(c) of Pub. L. 105–274, 112 Stat. 2419; 

Sec. 842.105 also issued under 5 U.S.C. 

8402(c)(1) and 7701(b)(2); Sec. 842.106 also 

issued under Sec. 102(e) of Pub. L. 104–8, 

109 Stat. 102, as amended by Sec. 153 of Pub. 

L. 104–134, 110 Stat. 1321–102; Sec. 842.107 

also issued under Secs. 11202(f), 11232(e), 

and 11246(b) of Pub. L. 105–33, 111 Stat. 

251, and Sec. 7(b) of Pub. L. 105–274, 112 

Stat. 2419; Sec. 842.108 also issued under 

Sec. 7(e) of Pub. L. 105–274, 112 Stat. 2419; 

Sec. 842.109 also issued under Sec. 1622(b) 

of Public Law 104–106, 110 Stat. 515; Sec. 

842.208 also issued under Sec. 535(d) of Title 

V of Division E of Pub. L. 110–161, 121 Stat. 

2042; Sec. 842.213 also issued under 5 U.S.C. 

8414(b)(1)(B) and Sec. 1313(b)(5) of Pub. L. 

107–296, 116 Stat. 2135; Secs. 842.304 and 

842.305 also issued under Sec. 321(f) of Pub. 

L. 107–228, 116 Stat. 1383, Secs. 842.604 and 

842.611 also issued under 5 U.S.C. 8417; Sec. 

842.607 also issued under 5 U.S.C. 8416 and 

8417; Sec. 842.614 also issued under 5 U.S.C. 

8419; Sec. 842.615 also issued under 5 U.S.C. 

8418; Sec. 842.703 also issued under Sec. 

7001(a)(4) of Pub. L. 101–508, 104 Stat. 1388; 

Sec. 842.707 also issued under Sec. 6001 of 

Pub. L. 100–203, 101 Stat. 1300; Sec. 842.708 

also issued under Sec. 4005 of Pub. L. 101– 

239, 103 Stat. 2106 and Sec. 7001 of Pub. L. 

101–508, 104 Stat. 1388; Subpart H also 

issued under 5 U.S.C. 1104; Sec. 842.810 also 

issued under Sec. 636 of Appendix C to Pub. 

L. 106–554 at 114 Stat. 2763A–164; Sec. 

842.811 also issued under Sec. 226(c)(2) of 

Public Law 108–176, 117 Stat. 2529; Subpart 

J also issued under Sec. 535(d) of Title V of 

Division E of Pub. L. 110–161, 121 Stat. 2042. 

Subpart F—Survivor Elections 

■ 23. Amend § 842.602 by revising the 

definition of ‘‘present value factor’’ to 

read as follows: 

§ 842.602 Definitions. 

* * * * * 

Present value factor means the 

amount of money (earning interest at an 

assumed rate) required at the time of 

annuity commencement to fund an 


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49282 Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Rules and Regulations 

annuity that starts at the rate of $1 a 

month and is payable in monthly 

installments for the annuitant’s lifetime 

based on mortality rates for annuitants 

paid from the Civil Service Retirement 

and Disability Fund; and increases each 

year at an assumed rate of cost-of-living 

adjustment. Assumed rates of interest, 

mortality, and cost-of-living adjustments 

used in computing the present value are 

those used by the Board of Actuaries of 

the Civil Service Retirement System for 

valuation of the Federal Employees’ 

Retirement System based on dynamic 

assumptions. The present value factors 

are unisex factors obtained as a 

composite of sex-distinct present value 

factors. Separate present value factors 

apply for FERS annuities that receive 

cost-of-living adjustments before the 

retiree attains age 62, versus FERS 

annuities that do not receive cost-ofliving adjustments before the retiree 

attains age 62. 

* * * * * 

■ 24. Add § 842.616 to subpart F to read 

as follows: 

§ 842.616 Publication of present value 

factors. 

When OPM publishes in the Federal 

Register notice of normal cost 

percentages under § 841.407, it will also 

publish updated present value factors. 

Subpart G—Alternative Forms of 

Annuities 

■ 25. Amend § 842.702 by revising the 

definition of ‘‘present value factor’’ to 

read as follows: 

§ 842.702 Definitions. 

* * * * * 

Present value factor has the same 

meaning in this subpart as defined in 

§ 842.602. 

* * * * * 

PART 847—ELECTIONS OF 

RETIREMENT COVERAGE BY 

CURRENT AND FORMER EMPLOYEES 

OF NONAPPROPRIATED FUND 

INSTRUMENTALITIES 

■ 26. The authority citation for part 847 

continues to read as follows: 

Authority: 5 U.S.C. 8332(b)(17) and 

8411(b)(6) and sections 1131 and 1132 of 

Pub. L. 107–107, December 28, 2001, 115 Stat 

1242; 5 U.S.C. 8347(a) and 8461(g) and 

section 1043(b) of Pub. L. 104–106, Div. A, 

Title X, Feb. 10, 1996, 110 Stat. 434. Subpart 

B also issued under 5 U.S.C. 8347(q) and 

8461(n). 

Subpart A—General Provisions 

■ 27. Amend § 847.103(b) to revise the 

definition of ‘‘actuarial present value’’ 

and to add the definition of ‘‘present 

value factor’’ in alphabetical order as 

follows: 

§ 847.103 Definitions. 

* * * * * 

(b) * * * 

Actuarial present value means the 

amount of monthly annuity at time of 

retirement multiplied by the applicable 

present value factor. 

* * * 

Present value factor has the same 

meaning in this part as defined in 

§ 842.602. 

* * * * * 

Subpart F—Additional Employee Costs 

Under the Retroactive Provisions 

§ 847.602 [Removed and Reserved] 

■ 28. Remove and reserve § 847.602. 

[FR Doc. 2017–23141 Filed 10–24–17; 8:45 am] 

BILLING CODE 6325–38–P 

DEPARTMENT OF AGRICULTURE 

Rural Housing Service 

7 CFR Part 3560 

RIN 0575–AC98 

Multi-Family Housing Program 

Requirements To Reduce Financial 

Reporting Requirements 

AGENCY: Rural Housing Service, USDA. 

ACTION: Final rule. 

SUMMARY: The Rural Housing Service 

(RHS) is revising its existing regulations 

regarding financial reporting. This 

action is necessary to align RHS 

requirements with those of the United 

States Department of Housing and 

Urban Development (HUD) utilizing a 

risk-based threshold reporting which 

will reduce the burden on the borrower 

to produce multiple financial reports; 

focus on high-risk properties; and, 

reduce the financial cost of reporting on 

properties. 

DATES: This rule is effective November 

24, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Janet Stouder, Deputy Director, MultiFamily Housing Portfolio Management 

Division, Rural Housing Service, Room 

1237S—STOP 0782, 1400 Independence 

Avenue SW., Washington, DC 20250– 

0782, Telephone: (202) 720–9728. 

SUPPLEMENTARY INFORMATION: 

Executive Order 12866, Classification 

This final rule has been determined to 

be non-significant and, therefore was 

not reviewed by the Office of 

Management and Budget (OMB) under 

Executive Order 12866. 

Authority 

The Multi-Family Housing program 

(MFH) is administered, subject to 

appropriations, by the U.S. Department 

of Agriculture (USDA) as authorized 

under Sections 514, 515, 516 and 521 of 

the Housing Act of 1949, as amended 

(42 U.S.C. 1484, 1485, 1486, and 1490). 

Environmental Impact Statement 

This document has been reviewed in 

accordance with 7 CFR part 1970, 

‘‘Environmental Program.’’ RHS has 

determined that this action does not 

constitute a major Federal action 

significantly affecting the quality of the 

environment. In accordance with the 

National Environmental Policy Act of 

1969, Public Law 91–190, an 

Environmental Impact Statement is not 

required. 

Regulatory Flexibility Act 

This final rule has been reviewed 

with regard to the requirements of the 

Regulatory Flexibility Act (5 U.S.C. 

601–612). The undersigned has 

determined and certified by signature 

on this document that this rule will not 

have a significant economic impact on 

a substantial number of small entities 

since this rulemaking action does not 

involve a new or expanded program nor 

does it require any more action on the 

part of a small business than required of 

a large entity. 

Executive Order 13132, Federalism 

The policies contained in this rule do 

not have any substantial direct effect on 

States, on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of Government. This rule does not 

impose substantial direct compliance 

costs on State and local Governments; 

therefore, consultation with the States is 

not required. 

Executive Order 12988, Civil Justice 

Reform 

This rule has been reviewed under 

Executive Order 12988. In accordance 

with this rule: (1) Unless otherwise 

specifically provided, all State and local 

laws that are in conflict with this rule 

will be preempted; (2) no retroactive 

effect will be given to this rule except 

as specifically prescribed in the rule; 

and (3) administrative proceedings of 

the National Appeals Division of the 

Department of Agriculture (7 CFR part 

11) must be exhausted before bringing 

suit in court that challenges action taken 

under this rule. 


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