Change in Agency Contributions for Employees covered under both CSRS and FERS

Date: Fri, 02 Jan 1998 10:34:32 -0500
To: "DC - All District Chiefs"<distribution>,
        "B  - Branch Chiefs and Offices"<distribution>,
        "AO - All Administrative Officers"<distribution>
From: "Alice A. Sabatini" <aasabati>
Subject: Change in Agency Contributions for Employees covered under
  both CSRS and FERS
Cc: "Catherine L Hill, ACH/Operations, Reston, VA" <clhill>,
        "Stephen F Blanchard, Deputy ACHO, Reston, VA" <sfblanch>,
        "Norman E Schmidt Jr., Ch., Br. of Human Res. Mgmt., Reston, VA" <nschmidt>

The following agency contribution changes were effective at the beginning
of this fiscal year (pay period 22).  This information was just made
available to us by the Payroll Office.

For FERS employees:  The agency contribution rate was reduced to 10.7%
(.8%) as a result of the adoption of a new set of economic assumptions for
the calculation of the amount of contribution required of new employees to
pay for their FERS basic benefits upon retirement.

For CSRS employees:  The agency contribution rate was increased from 7% to
8.51% (1.51%) as a result of the Balanced Budget Act of 1997.  The agency
contribution will revert to 7.5% in October 2002 and back to 7%  in January
2003.

The cumulative impact on your office will depend on the number of employees
that you have under each retirement system.  An office with a large number
of employees in FERS will see an overall decreased costs while an office
with a large number of employees in CSRS will see an overall increased
cost.  The AIS budget module will automatically adjust for these changes in
salary projections because it uses the current pay period salary rate as a
basis.

Please contact Nancy Hill (njhill) if you have questions on this changes.
The employee contributions to retirement are not scheduled for change
(increase for CSRS) until January 1999.