Federal Employees Retirement System (FERS) FERS

For most of the twentieth century federal workers were covered by the Civil Service Retirement System, created in 1920, which paid generous pensions but did not include Social Security. After Congress brought new federal employees into Social Security in 1983, it created the Federal Employees Retirement System in a law signed June 6, 1986, covering employees and members of Congress hired from 1984 on. Today nearly all federal civilian employees are under FERS, run by the Office of Personnel Management.

FERS has three parts. The basic annuity pays 1 percent of the average of an employee's highest three years of salary for each year of service, or 1.1 percent for those retiring at 62 or older with at least 20 years, with higher rates for members of Congress, law enforcement officers, firefighters, and air traffic controllers. Employees also pay into and receive Social Security. The third part is the Thrift Savings Plan, a 401(k)-style plan in which agencies contribute 1 percent of pay automatically and match employee contributions up to 5 percent. Employees hired since 2014 contribute 4.4 percent of pay toward the pension, compared with 0.8 percent for those hired before 2013.

Employees can retire with a full pension at a minimum age between 55 and 57 with 30 years of service, at 60 with 20 years, or at 62 with five, and retirees can keep their federal health coverage if they were enrolled for the five years before retiring. In 2025 a wave of departures through deferred resignations and layoffs swelled the backlog of retirement claims at OPM. Budget proposals in recent years have sought to raise employee contributions or cut benefits, which supporters say would bring federal benefits closer to the private sector and opponents say would hurt recruitment and break promises to workers.