Last Updated: November 8, 2026 Reading Time: 7 min

Why does one federal employee pay 0.8% of salary for FERS while a newer coworker pays 4.4%? Federal employees argued about it on Reddit this week. Congress created two new FERS contribution tiers in 2012 and 2013, and which one you're in depends on when you entered FERS service and what you'd done before.

Here's which FERS contribution tier you're in, the prior-service test that keeps some later hires at 0.8%, and what the extra money buys you.

The Three FERS Contribution Tiers

By law, your FERS deduction is a set percentage of basic pay minus the 6.2% you already pay for Social Security (5 U.S.C. § 8422; 26 U.S.C. § 3101(a)).

Tier Regular employees Special categories Members and congressional staff
FERS (original) 0.8% (7.0% minus 6.2%) 1.3% (7.5%) 1.3% (7.5%)
FERS-RAE (revised annuity employee) 3.1% (9.3%) 3.6% (9.8%) 3.1% (9.3%)
FERS-FRAE (further revised annuity employee) 4.4% (10.6%) 4.9% (11.1%) 4.4% (10.6%)

The special categories in the statute are law enforcement officers, firefighters, Capitol Police, Supreme Court Police, air traffic controllers, nuclear materials couriers and CBP officers. OPM's payroll rule uses the same percentages.

Which Tier You're In: The Three Tests

FERS-RAE (3.1%). You're FERS-RAE if you entered FERS-covered service in 2013 and, on December 31, 2012, all three of these were true (5 U.S.C. § 8401(37)):

  1. You weren't covered by FERS.
  2. You weren't performing FERS-creditable civilian service.
  3. You had less than 5 years of creditable civilian service.

FERS-FRAE (4.4%). You're FERS-FRAE if you were hired after 2013 and the same three tests were all true on December 31, 2013 (5 U.S.C. § 8401(38)).

Original FERS (0.8%). People hired before 2013, and 2013 hires who fail any one of the three tests on December 31, 2012. A later hire who fails a test can land in either original FERS or FERS-RAE: OPM's rule also keeps anyone who was covered by FERS-RAE on December 31, 2013 out of FRAE, so that person stays in RAE. Apply each tier's cutoff tests in order.

So a 2013 hire with 5 or more years of earlier creditable civilian service stays in original FERS at 0.8%. OPM's rule (5 C.F.R. § 841.103) keeps you out of FRAE if you had at least 5 years of creditable or potentially creditable civilian service before the end of 2013, even if you were rehired later.

Cases the sources don't settle

  • Military service. The test says "creditable civilian service." Military time doesn't count on the plain text, and we found nothing saying a military deposit changes that.
  • Refunded service. Whether civilian service you took a refund for counts toward the 5 years wasn't settled in the sources we read.
  • A narrow rehire case. If you were in FERS on December 31, 2012, left during 2013 with under 5 years, and came back after 2013, the statute and OPM's rule point different ways.

If any of these is you, ask HR how your retirement coverage was determined and check the coverage shown on your SF-50.

Same Pension Formula, Different Price

For regular employees the pension formula is the same in all three tiers: 1% of high-3 times years of service (5 U.S.C. § 8415(a)). Retire at 62 or later with 20 or more years and it's 1.1%, again in every tier.

The one formula difference by tier we found is for Members of Congress and congressional staff: those in RAE or FRAE get the regular 1% formula instead of the higher congressional one.

A FRAE employee does pay more for the same basic benefit. The gap between 0.8% and 4.4% is 3.6% of basic pay, which on a $90,000 salary is $3,240 a year.

Who pays the rest

For the "all other regular FERS employees" group (Postal Service employees and other groups are listed separately), OPM's actuaries put the full yearly cost of the FERS benefit at about 18.7% to 19.2% of pay, depending on tier, for pay periods starting on or after October 1, 2026 (the "normal cost"). Employees pay 0.8% to 4.4%, and the agency pays most of the rest. Our post on agency FERS contributions covers the agency side.

What You Get Back if You Leave

You can apply for a refund of your contributions after 31 or more consecutive days separated (or in a position not covered by FERS), as long as you aren't reemployed under FERS when you file and won't become eligible for an annuity within 31 days after filing (5 U.S.C. § 8424(a)). Taking it cancels the pension for that service; OPM's guidance for former employees describes how returning to service and redepositing can restore it. Spouses and former spouses have notice rights, and court orders can restrict a refund, under the same section.

For someone in FRAE, the refund is bigger because they paid more in. Whether to take it or leave it in for a deferred annuity is its own decision; see refund vs. deferred retirement.

Could the Rates Change?

The 2025 reconciliation law (Pub. L. 119-21, signed July 4, 2025) didn't change FERS contribution rates. Its federal-workforce sections cover FEHB, not FERS. A 2025 House committee proposal would have raised the 0.8% rate, but it wasn't in the law that passed; we covered what it would have cost in the FERS contribution increase proposal.

We didn't find a 2026 bill to change the rates in the sources we searched.

See Your Own FERS Deduction

The Federal Take-Home Pay Calculator lets you pick your FERS tier along with your GS grade, step and locality, and shows the FERS deduction per paycheck next to federal tax, TSP and FEHB. It labels the tiers by hire date, so if the prior-service test puts you in an earlier tier, pick the tier your SF-50 shows. It models the regular employee rates only (0.8%, 3.1% and 4.4%), not the higher special-category deductions.

To see what the pension itself will be worth, use the FERS Retirement Calculator, and the High-3 Calculator for the salary average it uses.

Frequently Asked Questions

Why do I pay 4.4% for FERS when my coworker pays 0.8%?

The law sets three FERS employee rates based on when you entered FERS-covered service and what service you had before. Most employees hired before 2013 pay 0.8%, most first hired in 2013 pay 3.1%, and most first hired after 2013 pay 4.4%.

I was hired in 2015 but worked for the government before. Am I FRAE?

Not necessarily. If you had 5 or more years of creditable civilian service before the end of 2013, or were covered by FERS at the cutoff, you can stay in an earlier tier. Check the coverage on your SF-50 and ask HR.

Does FERS-FRAE get a smaller pension?

No. For regular employees the formula is the same in every tier: 1% of high-3 times years of service, or 1.1% at 62 or later with 20 or more years.

Does military service count toward the 5-year test?

The test counts creditable civilian service, so military time doesn't count on the plain text. We found nothing saying a military deposit changes that.

Can I get my FERS contributions back?

Usually, yes. You can apply for a refund after 31 or more consecutive days separated (or in a position not covered by FERS), as long as you aren't reemployed under FERS when you file and won't become eligible for an annuity within 31 days after filing. Spouse and former-spouse rules also apply. Taking the refund cancels the pension for that service unless you later return and redeposit it.

Did Congress raise FERS contribution rates?

Not in the 2025 reconciliation law. A House committee proposal to raise the 0.8% rate wasn't in the final law, and we found no 2026 bill in our search.

Sources