Last Updated: September 13, 2026 Reading Time: 9 min
Federal employees talk about the FERS pension as the small leg of the three-legged stool. Outside government, it is the leg almost nobody has. In March 2025, 9% of private-sector workers participated in a defined benefit pension, and a majority of the nonunion ones are in plans that are closed to new hires or have stopped accruing. FedTools priced what a GS-9, GS-12, and GS-14 pension would cost to replace. The answer runs from $244,000 to $1.35 million, depending on the method.
The Number Nobody Puts Next to FERS
The BLS National Compensation Survey for March 2025 reports that 14% of private-industry workers had access to a defined benefit plan and 9% participated in one. Access to defined contribution plans, the 401(k) family, was 70%.
The Congressional Research Service traced the trend in report IF13274, "Access to Retirement Benefits in the Private Sector: 2010-2025." Defined benefit access fell from 20% in 2010 to 14% in 2025 while defined contribution access rose from 59% to 70%. FedWeek covered the CRS report on September 2, 2026 and stopped there. Nobody translated it into what a federal pension is actually worth.
The long view is starker. The Social Security Administration's historical summary puts private-sector defined benefit participation at 38% in 1980 and 20% in 2008. Those are participation figures, not access figures, so they are not perfectly comparable to the 2010-2025 access series, but the direction is unmistakable: roughly three quarters of private pension coverage disappeared in 45 years.
| Year | Private-sector DB coverage | Measure | Source |
|---|---|---|---|
| 1980 | 38% | participation | SSA Bulletin, citing BLS and DOL |
| 2008 | 20% | participation | SSA Bulletin, citing BLS |
| 2010 | 20% | access | CRS IF13274, citing BLS |
| 2025 | 14% | access | BLS NCS, March 2025 |
| 2025 | 9% | participation | BLS NCS, March 2025 |
State and local government is the closer comparison for a federal worker, and it is still not universal: 86% access, 74% participation. The federal civilian workforce is 98.4% FERS and 1.6% CSRS, and every one of them is accruing a pension.
Most of the 9% Are in Frozen Plans
The 9% overstates what a new private-sector hire can get, because a pension plan can exist and still be closed to new entrants, and some have stopped accruing altogether.
BLS's frozen-plan factsheet (March 2023) breaks down private-industry defined benefit participants by plan status. Among nonunion participants, 22% are in hard-frozen plans (no new benefits for anyone), 28% in soft-frozen plans where existing participants still accrue but new hires are shut out, and 6% in soft-frozen plans where only some participants accrue. That leaves 45% in fully open plans. Union participants fare better, with 80% in open plans.
A plan that is closed to new hires still pays its existing participants, but it is not a benefit a worker changing jobs can join. The share of private workers in a plan that is both open and accruing is smaller than 9%, and BLS does not publish a single all-worker figure for it.
FERS has no frozen tier. Every year of creditable service adds 1.0% of High-3, or 1.1% if you retire at 62 or later with 20 years, and the formula has not changed for anyone hired since 1987. The differences between FERS cohorts are in the employee contribution rate, not the benefit. Our FERS vs. CSRS comparison covers the formula details.
What a FERS Pension Costs to Replace: Two Prices
The FedTools computation uses three grades at Step 5 in the Washington-Baltimore-Arlington locality (33.94%, 2026 rates), two career lengths, retirement at 62 so the 1.1% multiplier applies to all years. Current salary stands in for High-3.
Step 1: annual FERS pension = 1.1% × High-3 × years
| Grade (Step 5, DC) | 2026 salary (High-3 proxy) | 20 years | 30 years |
|---|---|---|---|
| GS-9 | $80,041 | $17,609 | $26,414 |
| GS-12 | $116,071 | $25,536 | $38,303 |
| GS-14 | $163,104 | $35,883 | $53,824 |
Step 2, Method A: the 4% rule. How much would you need in a 401(k) to draw the same income at a 4% safe withdrawal rate? Pension × 25.
| Grade | 20-year pension → 401(k) equivalent | 30-year pension → 401(k) equivalent |
|---|---|---|
| GS-9 | $17,609 → $440,225 | $26,414 → $660,338 |
| GS-12 | $25,536 → $638,390 | $38,303 → $957,586 |
| GS-14 | $35,883 → $897,072 | $53,824 → $1,345,608 |
Step 2, Method B: buy the income. What would a life-only single-premium immediate annuity paying the same amount cost at age 62? Published 2026 rate surveys put a life-only SPIA at about $567 a month per $100,000 of premium at age 60 and roughly $630 to $679 at age 65 for a male buyer. FedTools interpolated an age-62 rate of about $602 a month per $100,000, or $7,224 a year, which prices each pension dollar at about $13.84 of premium. This is an estimate from published surveys, not an insurer quote.
| Grade | 20-year pension → annuity price | 30-year pension → annuity price |
|---|---|---|
| GS-9 | $17,609 → about $243,800 | $26,414 → about $365,600 |
| GS-12 | $25,536 → about $353,500 | $38,303 → about $530,200 |
| GS-14 | $35,883 → about $496,700 | $53,824 → about $745,100 |
The two methods disagree by 30% to 45%, and both are right. The 4% rule is a decumulation guideline built to survive a bad 30-year sequence and leave principal behind. An immediate annuity pools mortality across thousands of buyers and leaves nothing to heirs, so the insurer can pay more per dollar. If you want to know what your pension is worth as savings, use Method A. If you want to know what it would cost to buy, use Method B. State it as a range: a 30-year GS-12 pension is worth $530,000 to $958,000.
Methodology note. Inputs: 2026 GS base pay at Step 5 and the 33.94% DC locality rate from the FedTools gs-pay-2026 data file, which mirrors the OPM 2026 tables; the FERS formula from OPM; the 4% rule as a heuristic; SPIA rates from 2026 published surveys (ImmediateAnnuities.com, as reported by several aggregators), with the age-62 figure linearly interpolated between the age-60 and age-65 points. All cells are computed from unrounded pensions and rounded once at the end (Method B to the nearest hundred). Recompute: salary × 0.011 × years = pension; pension × 25 = Method A; pension × 100,000 ÷ 7,224 = Method B. Caveats: retiring before 62 drops the multiplier to 1.0%, cutting each pension figure by about 9%; a real High-3 is usually a little below current salary after a recent promotion; both methods assume level, life-only income with no COLA and no survivor election.
Pension Access Follows Income, Except in Government
The CRS report includes a figure most coverage skips. Access to any retirement plan in the private sector runs from 48% for workers in the lowest earnings quartile to more than 80% for the highest. Defined benefit coverage is concentrated further still, in large unionized employers and legacy firms.
A GS-9 Step 5 in DC earns $80,041 in 2026. In the private sector that income sits in the middle of the distribution, where a guaranteed pension is the exception. The GS-9 has one, it accrues every year, and after 30 years it pays $26,414 a year for life. Priced as a 401(k) balance, that is $660,350 that a comparable private-sector worker would have had to save on their own.
A total-compensation comparison built on salary alone misses this entirely. The State of Federal Retirement Readiness 2026 report covers how the pension leg interacts with TSP balances across the workforce.
What This Does Not Say
Three limits keep these numbers from being quoted past what they support.
The values exclude the FERS cost-of-living adjustment. FERS retirees get a capped COLA once they are 62 and drawing the pension. A private annuity with an inflation rider costs more premium for the same starting income, so the true replacement cost is higher than Method B shows. The direction is certain; the size depends on the rider.
The values exclude the survivor benefit. A FERS retiree can elect a survivor annuity that reduces their own payment by 10% to protect a spouse. A joint-life commercial annuity likewise pays less per dollar of premium. Again, the plain life-only price understates the pension.
And the values are not a recommendation. A pension is worth more to a 62-year-old who lives to 95 and less to one who does not. The FERS employee contribution rate, 0.8%, 3.1%, or 4.4% of salary depending on hire date, is the price paid for the benefit, and our is FERS worth it analysis works through that side of the ledger.
Calculate What Your Own FERS Pension Is Worth
Use the free FERS Retirement Calculator to compute your annual pension from your real High-3, years of service, and retirement age. Multiply the result by 25 for the 4% rule figure. Pin down your High-3 first with the High-3 Calculator, and compare the pension leg with the savings leg in the TSP Calculator.
Frequently Asked Questions
How rare is a pension like FERS in the private sector today?
In March 2025, 14% of private-industry workers had access to a defined benefit pension and 9% participated in one, per the BLS National Compensation Survey. State and local government workers do far better, at 86% access and 74% participation, but even there it is not universal the way FERS is for federal employees.
Has defined benefit coverage always been this low?
No. In 1980, 38% of private-sector wage and salary workers participated in a defined benefit pension, per the Social Security Administration's summary of BLS and Labor Department data. That fell to 20% by 2008 and about 9% by 2025, a drop of roughly three quarters over 45 years.
If 9% of private workers have a defined benefit plan, do they have something like FERS?
Mostly not. A large share of that 9% sit in frozen plans. BLS data from March 2023 shows that among nonunion private-sector participants, 22% are in hard-frozen plans that no longer accrue and another 34% are in soft-frozen plans that are closed to new hires while all or some current participants still accrue, so only 45% are in fully open plans. FERS is open to every new hire and accruing for every active employee.
What is a FERS pension worth if I tried to buy the same income?
It depends on the pricing method. Under the 4% rule, a GS-12 Step 5 in the Washington-Baltimore locality retiring at 62 with 30 years would need about $958,000 in a 401(k) to replace a $38,303 annual pension. Priced against 2026 immediate annuity rates, the same income would cost about $530,000 to buy outright. Either way it is a six-figure asset most private-sector workers never build for guaranteed lifetime income.
Why is the 401(k) figure so much higher than the annuity-purchase figure?
The 4% rule is built to survive a bad 30-year retirement and still leave money behind. A commercial immediate annuity pools mortality risk across thousands of buyers and pays nothing to heirs, so insurers can pay more income per dollar of premium. Neither number is wrong. One answers how much you need in savings, the other what the income costs to buy today.
Is pension access equal across income levels?
No. The Congressional Research Service's analysis of the same BLS data shows retirement-plan access runs from 48% for the lowest-earning quarter of private-sector workers to more than 80% for the highest-earning quarter. A GS-9 federal employee has a guaranteed pension that most private-sector workers at the same income level do not.
Do these FERS values include the COLA or a survivor benefit?
No. The lump-sum and annuity comparisons assume a level, life-only income. FERS adds a capped cost-of-living adjustment once you are 62 and drawing the pension, and an optional survivor annuity that reduces your own payment to protect a spouse. A private annuity with both features would cost noticeably more than the plain life-only figure shown here.
How do I find my own numbers instead of the GS-9, GS-12, and GS-14 examples?
Use the FERS Retirement Calculator with your real years of service and retirement age, the High-3 Calculator to pin down your actual High-3 rather than your current salary, and the TSP Calculator to see how the savings leg compares with the pension leg.
Related Resources
- FERS Retirement Calculator: Your annual pension from High-3, service, and age.
- High-3 Calculator: The real High-3, not the current salary.
- TSP Calculator: The savings leg next to the pension leg.
- Is the FERS Pension Worth It?: The contribution-rate side of the ledger.
- FERS vs. CSRS Comparison: Formula, multiplier rules, and COLA differences.
- State of Federal Retirement Readiness 2026: Pension and TSP data across the workforce.
Sources: BLS, Employee Benefits in the United States, March 2025 (USDL-25-1464) · BLS factsheet, defined benefit frozen plans (March 2023) · CRS report IF13274, Access to Retirement Benefits in the Private Sector: 2010-2025 · SSA, The Disappearing Defined Benefit Pension, Social Security Bulletin Vol. 69 No. 3 · OPM, FERS annuity computation · FedTools 2026 GS pay data file · 2026 SPIA rate surveys (ImmediateAnnuities.com, via aggregator coverage).