Applicability of this section. This section applies to all retirees who are required to pay deposits under § 831.631, § 831.632, § 831.682, or § 831.684 and have paid some portion (but not all) of the deposit prior to October 1, 1993, or from annuity accruing before that date.

Other methods of payment not available. Retirees described in paragraph (a) of this section must have a permanent annuity reduction computed under paragraph (d) of this section.

Commencing date of the reduction. A reduction under this section commences on October 1, 1993.

Computing the amount of the reduction. The annuity reduction under this section is equal to the lesser of—

The amount of the principal balance remaining to be paid on October 1, 1993, divided by the present value factor for the retiree's age on October 1, 1993; or

Twenty-five percent of the rate of the retiree's self-only annuity on October 1, 1993.

Termination of the reduction. (1) The reduction under this section terminates on the date that the retiree dies.

If payment of a retiree's annuity is suspended or terminated and later reinstated, or if a new annuity becomes payable, OPM will increase the amount of the original reduction computed under paragraph (d) of this section by any cost-of-living adjustments under section 8340 of title 5, United States Code, occurring between the commencing date of the original reduction and the commencing date of the reinstated or new annuity (but the adjustment reduction may not exceed 25 percent of the rate of the reinstated or new self-only annuity).