Federal Employees Retirement System
Each of the six core areas below are critical to maximizing the value of your federal retirement annuity. The word annuity, when used here, refers to your government retirement benefit or sometimes referred to as your government pension or what is called a "defined benefit" retirement plan. On the other pages of this website, you will also learn about the Thrift Savings Plan which is your "defined contribution" benefit and will be the key to your early retirement and future financial security. As a FERS-covered employee, you also contribute to Social Security via payroll tax withholding and your government insurance will also be a valuable addition to your life after retirement benefits. FERS provides a lifetime payment that you will receive when you meet the eligibility requirements and apply for your earned benefits. You will learn the basics of each component and then you will dig deeper to learn some insider tips that will help you make the most of your FERS retirement and help you to have a smooth transition from your agency personnel and payroll office to the Office of Personnel Management. In addition, you will find FAQ's, Resources, useful examples and illustrations, and more.
OPM administers the retirement benefits for most civilian federal employees. While you are employed, you contribute to FERS from your basic pay. If you were first hired into federal service before 2013, your contribution is .8% of your basic pay. However, for those hired in 2013, Congress increased the employee contribution to 3.1% of basic pay and the following year, the employee contribution topped out at 4.4% payroll deduction. If you are a Special Category Employee (SCE) such as a law enforcement officer, firefighter, FERS "Special" employees of the CIA, Air Traffic Controllers or member of the Supreme Court police, you contribute an additional .5% towards your FERS retirement. If you leave a "covered" SCE position and do not meet the requirements for the enhanced benefits of a SCE retirement, this additional contribution will not be refunded to you unless you qualify for a refund of all retirement contributions which would forfeit your right to a FERS annuity, unless you were to be reemployed and make a redeposit of the refund (with interest).
Although some FERS employees pay more into FERS, the value of the benefit is computed exactly the same and the eligibility rules are identical. The reason for Congress to increase the employee contribution was to keep FERS fully funded and able to pay promised future benefits without increasing the Agency contribution. Your agency pays much more into FERS than you do. In 2021, OPM issued a Benefits Administration letter to provide notice of the revised normal cost percentages for employees covered by the Federal Employee Retirement System (FERS) Act of 1986. The revised normal cost percentages, as described in the enclosed Tables, are effective at the beginning of the first pay period commencing on or after October 1, 2021 and affect agencies’ contribution rates for FERS employees, FERS Revised Annuity Employees (FERS-RAE) and FERS- Further Revised Annuity Employees (FERS-FRAE).
Federal Employees Retirement System-Revised Annuity Employees (RAE) Benefits Administration Letter, 12-104, 10/3/2012
Federal Employees Retirement System-Revised Annuity Employees (RAE)-Additional Guidance , Benefits Administration Letter, 13-102, 6/4/2013
Federal Employees Retirement System- Further Revised Annuity Employees (FRAE), Benefits Administration Letter, 14-102, 1/30/2014