Expert's View

In case you missed it, the contributions rates for FERS employees hired (or rehired after a break in service) during 2013 jumped from .08 for those hired before 2013 to 3.1 percent. This rate applied to Revised Annuity Employees (RAE).

For those first hired in 2014 or later, the new contribution rate is 4.4 percent. This rate applies to Further Revised Annuity Employees (FRAE).

In both cases, special category positions, such as law enforcement officer and firefighter, pay .05 percent of salary above those rates.

Also in both cases, there is an exception for those with at least five years of prior creditable (or potentially creditable) service.

If you think that employees were the only ones that got nicked with higher contribution rates, think again. The FERS contribution rates for agencies beginning on the first pay period on or after October 1, 2014 were just published by OPM in its Benefits Administration Letter 14-305. And wouldn’t you know it, the rates for agencies have gone up, too.

Unlike the employee increase, the White House and the Congress didn’t have anything to do with that. Instead agency contributions are based on revised economic assumptions made by the Board of Actuaries of the Civil Service Retirement System.

The figures also show that, as with CSRS, the government actually bears the lion’s share of responsibility for financing federal retirement benefit.

The agency contributions for Pre-2013 FERS employees are:

Current New

Regular 11.9 13.2

Law Enforcement Officer 24.0 26.5

Air Traffic Controller 23.7 28.9

Military Reserve Technicians 12.6 15.0

Customs and Border Protection 24.0 26.5

For RAE employees, the agency contribution rates are:

Regular 9.6 11.1

Law Enforcement Officers 26.3 28.2

Air Traffic Controllers 26.0 31.1

Military Reserve Technicians 14.9 16.9

Customs and Border Protection 26.3 28.2

And for FRAE employees, the agency contribution rates are:

Regular 9.6 11.1

Law Enforcement Officers 24.0 26.5

Air Traffic Controllers 23.7 28.9

Military Reserve Technicians 12.6 15.0

Customs and Border Protection 24.0 26.5

Higher rates are not only hard on new employees, they cut deeper into each agency’s budget, making it harder than ever for them to fully staff their operations.