COST METHODS AND ASSUMPTIONS

OPM used the following assumptions:

• The actuarial cost method is Aggregate Entry Age Normal.
• Long-term economic assumptions are as follows:
• Rate of inflation — 2.5%
• COLA — 2.5% for CSRS. 2.0% for FERS.
• Annual general salary increases — 3.5%
• Interest rate — 4.8% for CSRS. 5.1% for FERS.