FERS Contribution Hike 2025: $4,969/Yr That Didn't Happen (Yet)

Last Updated: May 6, 2026 Reading Time: 9 min

In April and May of 2025, Congress proposed raising FERS contributions for pre-2013 federal employees from 0.8% to 4.4%, a 3.6 percentage point hike that would have cost a GS-13 Step 5 in DC about $4,969 per year. It was stripped from the One Big Beautiful Bill Act (OBBBA) before President Trump signed it July 4, 2025. Your contribution rate did not change. But the proposal is not dead. It came close. And the dollar math nobody else has published is the reference you want when this comes back. Here is exactly what was proposed, what would have cost what, why it failed, and the realistic odds it returns.

Key Takeaways

• Your FERS contribution rate did not change. Pre-2013 hires still pay 0.8%. 2013 hires (FERS-RAE) still pay 3.1%. 2014+ hires (FERS-FRAE) still pay 4.4%. No change since 2014.
• The 2025 proposal would have raised pre-2013 hires to 2.6% in 2026, then 4.4% in 2027 (3.6 percentage points total). 2013 FERS-RAE would have gone to 3.75%, then 4.4% (1.3 pp total). FRAE was already at 4.4%, no change.
• For a GS-13 Step 5 DC pre-2013 employee, the cost would have been ~$4,969/year at full phase-in. GS-15: ~$6,910/year. GS-9: ~$2,882/year.
• The proposal also included FERS Supplement elimination for retirees after Jan 1, 2028 (worth ~$90,000 in lost lifetime income for an average retiree at MRA 57).
• All current-employee provisions stripped before final passage. House Rules Committee removed the contribution increase + High-5 change before the May 22 House vote. Senate parliamentarian struck the supplement elimination under the Byrd Rule. Final OBBBA: zero FERS changes for current employees.
• Risk of return: Low for 2026, moderate for 2027+ via a future reconciliation vehicle. Standalone legislation would require 60 Senate votes (effectively blocked). Historically, FERS rates have been raised twice via reconciliation (2012 and 2013).

Timeline: What Was Proposed, What Happened

April 30, 2025. House Oversight and Government Reform Committee advanced four FERS retirement cut provisions in reconciliation markup:

• Section 90001: contribution rate increase for current employees
• Section 90002: FERS Supplement elimination
• Section 90003: High-5 pension calculation change (replacing High-3)
• Section 90004: new hire at-will employment choice (with 9.4% contribution as alternative)

May 18-22, 2025. House Rules Committee revisions before floor vote:

• Section 90001 (current employee contribution increase): REMOVED
• Section 90003 (High-5 change): REMOVED
• Section 90002 (Supplement elimination): adjusted to Jan 1, 2028 effective date
• Section 90004: retained

May 22, 2025. House passes H.R. 1 by 215-214. Contains: Supplement elimination (2028) + new hire at-will. Does NOT contain: contribution rate increase or High-5 change.

June 2025. Senate parliamentarian rules that most remaining federal employee provisions violate the Byrd Rule. Senate strips the Supplement elimination and the new hire at-will provision.

July 1, 2025. Senate passes the bill 50-50 with VP Vance casting the tie-breaker.

July 3, 2025. House concurs with Senate amendments.

July 4, 2025. President Trump signs OBBBA into law. Zero FERS benefit changes for current employees. No contribution rate changes. No Supplement elimination. No High-5 change. No new-hire at-will provision.

Today (May 2026). All FERS contribution rates unchanged. No active legislation proposing changes. NARFE and AFGE continue monitoring for a 2027+ reconciliation vehicle that could revisit these proposals.

What Was Proposed: The Dollar Impact Tables

This is the original data centerpiece. No competitor has published a per-paycheck dollar impact matrix by GS grade. These figures are FedTools 2026 calculations using the OPM 2026-DCB salary table (Washington-Baltimore-Arlington locality, 33.94% adjustment) and the proposed contribution rate paths from CRS Reports IF12996 and IF13020.

Pre-2013 FERS Employees (current rate 0.8%)

Proposed path: 0.8% → 2.6% (2026) → 4.4% (2027+). Net additional employee cost: 3.6 percentage points at full phase-in.

Grade (Step 5)	DC Salary 2026	Current biweek (0.8%)	Phase 2 biweek (4.4%)	Added cost / biweek	Added cost / year
GS-9	$80,041	$24.63	$135.46	$110.83	$2,882
GS-12	$116,071	$35.71	$196.43	$160.72	$4,179
GS-13	$138,024	$42.47	$233.58	$191.11	$4,969
GS-14	$163,104	$50.19	$276.11	$225.92	$5,874
GS-15	$191,850	$59.03	$324.82	$265.79	$6,910

Lifetime cost projection (held salary constant at 2026 figure, conservative):

• GS-13 Step 5 over 15 remaining years: ~$74,535
• GS-13 Step 5 over 30 remaining years: ~$149,070
• GS-15 Step 5 over 15 remaining years: ~$103,650

Real-world cost would be higher because salaries grow through promotions and step increases.

FERS-RAE (Hired in 2013, current rate 3.1%)

Proposed path: 3.1% → 3.75% (2026) → 4.4% (2027+). Net additional cost: 1.3 percentage points at full phase-in.

Grade (Step 5)	DC Salary 2026	Added cost / biweek	Added cost / year
GS-9	$80,041	$40.03	$1,041
GS-12	$116,071	$58.03	$1,509
GS-13	$138,024	$69.01	$1,794
GS-14	$163,104	$81.55	$2,120
GS-15	$191,850	$95.93	$2,494

FERS-FRAE (Hired 2014 or later, current rate 4.4%)

No change proposed. FRAE employees already contribute 4.4%, the target rate. The 2025 proposal was specifically designed to close the disparity between older hires (paying less) and newer hires (already paying the full rate).

The Disparity the Proposal Was Designed to Close

A GS-13 Step 5 DC employee hired in 2007 currently contributes $42.47 per biweekly check (0.8% of salary). A colleague at the same grade and step hired in 2016 contributes $233.58 (4.4% of salary). That is a $191.11 per-paycheck difference, or $4,969 per year, between two employees doing the same work.

The 2025 proposal would have eliminated this gap by raising the older employee to 4.4% over two years. Younger employees would have seen no change. The argument from supporters: equal contribution for equal benefit. The argument from opponents: pre-2013 employees signed up for a benefit package that included the lower contribution rate, and changing it mid-career amounts to a unilateral pay cut.

The proposal was stripped before final passage.

The Second Cost Layer: Supplement Elimination (Also Failed)

The House-passed bill (May 22, 2025) included Section 90002, which would have eliminated the FERS Special Retirement Supplement for new retirees after January 1, 2028. The Senate parliamentarian struck this under the Byrd Rule.

For context, if it had passed:

• Average FERS Supplement (FY2025): approximately $18,000/year ($1,500/month)
• Duration of supplement: retirement age until 62 (Social Security eligibility). For someone retiring at MRA 57, that is 5 years.
• Lifetime cost of elimination at average: approximately $90,000 in lost income
• Higher earners with more years of service would have a larger supplement and a larger loss.

For our GS-13 Step 5 DC pre-2013 employee with 15 years remaining and an MRA-30 retirement plan, the combined cost stack of both proposals would have been:

• FERS contribution increase over 15 years: ~$74,535
• Supplement loss at $18,000/year for 5 years: ~$90,000
• Combined: ~$164,500 in additional lifetime cost

This combined number does not exist anywhere else. It is the FedTools 2026 calculation that competitors have not produced.

For deeper context on the Supplement (still in effect under current law), see our FERS Supplement Political Risk guide, our FERS Special Retirement Supplement Guide, and the Earnings Limit explainer.

CBO Numbers: What This Would Have Saved (or Cost, Depending on View)

For the dropped proposals, CBO estimated 10-year impacts:

Provision	CBO Score (10-year)
Increased employee contributions (Section 90001)	$34.5 billion increased revenue
Reduced employer/agency contributions	$31.8 billion reduced spending
FERS Supplement elimination (Section 90002)	$10.0 billion reduced spending
Combined maximum impact (if all had passed)	~$76.3 billion over 10 years

These numbers explain why the proposals keep coming back: they generate real budgetary savings on paper. They also explain why federal employee unions (NARFE, AFGE) defend against them so consistently.

Could This Come Back?

Short term (2026): Very low risk. The OBBBA reconciliation vehicle is exhausted for this Congress. A standalone bill would need 60 Senate votes, which the current Senate cannot provide.

Medium term (2027+): Moderate risk. A future Congress could use a new reconciliation package. The 2025 effort failed primarily on the Byrd Rule (the parliamentarian ruled the provisions weren't sufficiently budgetary). Future architects could restructure the language to survive that test. NARFE has been explicit that it expects the proposals to return.

Historical precedent: FERS contribution rates have already been raised twice via reconciliation:

• 2012: Middle Class Tax Relief and Job Creation Act created FERS-RAE at 3.1% for 2013 hires
• 2013: Bipartisan Budget Act created FERS-FRAE at 4.4% for 2014+ hires

The mechanism is well-established. The 2025 effort was not unprecedented.

What would trigger re-introduction: A future deficit reduction need, a reconciliation bill needing offsets, or a new Senate composition with stronger procedural margin.

What This Means for You Today

If you are a pre-2013 hire: Your 0.8% rate is unchanged. Don't preemptively change retirement plans based on a proposal that didn't pass. Do bookmark this post (or the FERS Retirement Calculator) for the next time this gets serious.

If you are a 2013 FERS-RAE hire: Your 3.1% rate is unchanged. You were less exposed than pre-2013 hires (1.3 pp instead of 3.6 pp).

If you are a 2014+ FRAE hire: You were not exposed at all. Already at 4.4%.

If you are within 5 years of retirement and planning around the FERS Supplement: The Supplement is still available under current law. Make your retirement timing decisions based on the current rules. If a future bill threatens the Supplement again, FedTools will publish a fresh analysis.

If you are watching for the next round: The realistic risk window is 2027+ via reconciliation. Pay attention to budget resolutions and reconciliation instructions in the lead-up to FY2028 appropriations. NARFE and AFGE legislative bulletins are the most reliable early-warning sources.

Run Your Numbers

Use the FERS Retirement Calculator to project your annuity under current law. Use the GS Pay Calculator to confirm your salary and locality, then multiply by your current contribution rate (0.8% / 3.1% / 4.4%) to confirm what you actually pay today. The dollar tables above show what would have changed if the 2025 proposal had passed.

For broader FERS context, see the FERS Retirement Guide. For the related supplement risk picture, see FERS Supplement Political Risk 2026. For where MRA+10 retirees fit in this cost picture, see our MRA+10 Lifetime Cost guide. For TSP context (the other half of federal retirement income), see TSP + Roth IRA Tax Diversification.

Project your FERS pension under current rates →

Frequently Asked Questions

Did Congress raise FERS contribution rates in 2025?

No. Congress proposed it but did not enact it. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, left FERS contribution rates for current employees completely unchanged. The proposal to raise pre-2013 employees from 0.8% to 4.4% was stripped by the House Rules Committee before the bill even reached the Senate floor.

What is my current FERS contribution rate?

It depends on when you were hired. If you were hired before January 1, 2013: 0.8% of your salary. If hired in calendar year 2013: 3.1%. If hired on or after January 1, 2014: 4.4%. These rates have not changed since 2014.

If the contribution increase had passed, how much would it have cost me per year?

For a GS-13 Step 5 employee in DC locality (2026 salary $138,024) hired before 2013: approximately $4,969 more per year at the full 4.4% phase-in. For someone hired in 2013 (FERS-RAE 3.1%): approximately $1,794 more per year. See the grade-by-grade tables in the post for all GS levels.

Is the FERS supplement still available?

Yes. The House-passed bill would have eliminated it for new retirees after January 1, 2028, but the Senate parliamentarian struck that provision under the Byrd Rule. The supplement was not eliminated and remains fully available under current law.

What was the High-5 pension change, and did it pass?

The proposal would have replaced the High-3 average salary calculation (used to determine your pension) with a High-5 average, reducing the pension benefit for most employees. It was removed by the House Rules Committee before the bill passed the House and never reached the Senate. Your FERS pension is still calculated using your highest 3 consecutive years of salary.

Why do different federal employees contribute different percentages to FERS?

Congress has used budget reconciliation bills to raise FERS employee contributions twice. Original FERS employees (hired through 2012) contribute 0.8%, set in 1987. The 2012 budget deal raised the rate to 3.1% for those hired in 2013 (FERS-RAE). The 2013 budget deal raised it further to 4.4% for those hired in 2014 and later (FERS-FRAE). The 2025 proposal attempted to equalize all tiers at 4.4%.

Do law enforcement officers and firefighters pay a different FERS contribution rate?

Yes. Federal law enforcement officers (1811s), firefighters, air traffic controllers, and others in special category positions contribute a higher rate: 1.3% (pre-2013 hires), 3.6% (2013 hires), or 4.9% (2014+ hires). These groups were NOT targeted by the 2025 contribution increase proposal.

How does the FERS employee contribution compare to what my agency contributes?

The employee contribution (0.8% / 3.1% / 4.4%) is relatively small. The agency's contribution to FERS in FY2026 is approximately 18.4% of payroll for regular FERS employees and 16.5% for FERS-RAE. The proposed increase would have shifted more of the cost to employees while reducing the agency (appropriated) contribution by an estimated $31.8 billion over 10 years.

Could the FERS contribution increase come back in a future bill?

Possibly, in a future reconciliation vehicle (2027 or later). Standalone legislation would require 60 Senate votes, effectively impossible in the current Senate. The 2025 effort failed primarily because the Senate parliamentarian ruled the provisions violated the Byrd Rule. Future architects could restructure the proposals to survive that test. NARFE and AFGE remain vigilant. Historically, FERS contributions have been raised twice via reconciliation (2012 and 2013).

What is the difference between FERS, FERS-RAE, and FERS-FRAE?

All three are FERS, just with different employee contribution rates set at different hire dates. Original FERS (pre-2013 hires) contributes 0.8%. FERS-RAE (Revised Annuity Employees, hired in calendar year 2013) contributes 3.1%. FERS-FRAE (Further Revised Annuity Employees, hired January 2014 or later) contributes 4.4%. The annuity formula is identical across all three groups: 1% (or 1.1% if age 62+ with 20+ years) times High-3 times years of service.

Related Resources

• FERS Retirement Calculator: Project your annuity under current law
• GS Pay Calculator: Confirm your salary, locality, and biweekly contribution
• FERS Retirement Guide: Pillar guide on FERS service credit, MRA, and pension math
• FERS Supplement Political Risk 2026: The supplement elimination story (still alive as a risk)
• FERS Special Retirement Supplement Guide 2026: Eligibility + amount
• FERS Supplement Earnings Limit 2026: The earnings test rules
• MRA+10 Lifetime Cost 2026: The 4-penalty stack for early retirees
• TSP + Roth IRA Tax Diversification 2026: The tax-side of the federal retirement story

Sources: NARFE: Federal Workforce Provisions Dropped from H.R. 1 Prior to Senate Passage · Federal News Network: House-Passed Reconciliation Bill · GovExec: All Provisions Targeting Federal Worker Benefits Stricken From Senate Reconciliation Package · FedWeek: CBO Analyses, Projects Impact of Federal Retirement Proposals in House Bill · CBO Publication 61381: Reconciliation Recommendations of the House Committee on Oversight and Government Reform · CRS IF12996: Increase in FERS Employee Contribution Requirements · CRS IF13020: FERS, MSPB, and FEHB Provisions in H.R. 1, as Passed by the House · FedSmith: Federal Employee Proposals Scrapped From OBBBA · AFGE: Successfully Prevents Severe Cuts to Federal Workers' Retirement Benefits · OPM: 2026 General Schedule Locality Pay Tables