Agency contributions rates going up in October?

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Mad Maxx
Posts: 46
Joined: Mon Jan 09, 2017 1:57 pm

Agency contributions rates going up in October?

Post by Mad Maxx »

I just got passed a "Benefits Administration Letter" Number 19-305, dated June 2019 from the Office of Personnel Management that states: At its 2017 meeting, the Board of Actuaries of the Civil Service Retirement System recommended revised long term economic assumptions and changes to the demographic assumptions for use in actuarial valuations of CSRS and FERS. These revised assumptions resulted in new normal cost percentages that increase agencies' contribution rates for FERS employees.... beginning in October 2019.

It then provides tables on different rate changes to include: Regular from 13.7% to 16%; Law Enforcement/Firefighters from 30.1 to 33.4%; Customs and Border Protection officers from 31.8 to 33.2%, etc.

Anybody know anything about this? I did some research and couldn't find anything. I couldn't even find 19-305 on line (with my limited search ability). Someone asked if this means the Government was going to increase their contributions into our TSP matching. Anyone else hear anything? I would upload the copy I have, but don't have that capability where I am sitting right now.

nweis
Posts: 21
Joined: Fri Dec 29, 2017 10:51 am

Re: Agency contributions rates going up in October?

Post by nweis »

The CSRDF’s largest sources of income are (1) annual payments from the general fund of the Treasury to make up for the insufficient funding of benefits accrued under CSRS, (2) payments from federal agencies and the Postal Service on behalf of their employees, and (3) interest payments on the U.S. Treasury bonds it holds. Agency contributions under CSRS are equal to 7.0% of payroll, and are supplemented by transfers from the general fund of the Treasury equal to approximately 12% of payroll. Agency contributions to FERS are required by law to be equal to the full actuarial cost of the program minus employee contributions. Effective FY2015, employing agencies contribute 13.7% of payroll on behalf of FERS employees first hired before 2013, and 11.9% of pay on behalf of FERS employees first hired in 2013 or later (including individuals hired in 2014 or later).11 These three sources of income are intra-governmental transfers that increase the fund’s budget authority, as recorded in the accounts of the U.S. Treasury. The fund receives Treasury bonds as a record of this budget authority, which it redeems periodically as annuity payments come due.12

https://fas.org/sgp/crs/misc/98-972.pdf

Mad Maxx
Posts: 46
Joined: Mon Jan 09, 2017 1:57 pm

Re: Agency contributions rates going up in October?

Post by Mad Maxx »

Thanks Nweis for the info. If I read this correctly, it isn't an increase to us, personally, but rather to the system.

Scout
Posts: 15
Joined: Mon Apr 16, 2012 9:51 am

Re: Agency contributions rates going up in October?

Post by Scout »

It's payments into FERS to keep it solvent, nothing to do with TSP.

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ArrieS
Posts: 1072
Joined: Sun Aug 05, 2012 10:56 am

Re: Agency contributions rates going up in October?

Post by ArrieS »

Any idea if our contributions are percentage based on a percentage of the full actuarial cost or our pay? If the amount agencies contribute is going up I wonder if our share will increase also.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar

quidam65
Posts: 25
Joined: Sun Mar 10, 2019 6:40 pm

Re: Agency contributions rates going up in October?

Post by quidam65 »

ArrieS wrote:Any idea if our contributions are percentage based on a percentage of the full actuarial cost or our pay? If the amount agencies contribute is going up I wonder if our share will increase also.
No. Whatever your FERS annuity contribution rate was when you first came on board is what it will remain barring a legislative change. In my case it is 0.8%.

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ArrieS
Posts: 1072
Joined: Sun Aug 05, 2012 10:56 am

Re: Agency contributions rates going up in October?

Post by ArrieS »

quidam65 wrote:
ArrieS wrote:Any idea if our contributions are percentage based on a percentage of the full actuarial cost or our pay? If the amount agencies contribute is going up I wonder if our share will increase also.
No. Whatever your FERS annuity contribution rate was when you first came on board is what it will remain barring a legislative change. In my case it is 0.8%.
Yes, but my question was is that 0.8% of my pay or the actuarial cost.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar

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