Enhanced FERS contributions: FERS-RAE and FRAE

Covered employees fund part of their own enhanced benefit. Special-provision employees, including law enforcement officers, firefighters, and air traffic controllers, contribute an extra 0.5% of pay toward FERS, on top of the base rate every federal employee pays.

The extra contribution pairs with the enhanced 1.7% pension formula and earlier retirement eligibility. A larger, earlier pension costs more to fund, and part of that cost is split between the government and the covered employee.

This is separate from the base rate question. Every FERS employee, covered or not, pays a base contribution rate set by their hire date. The 0.5% special-provision add-on applies on top of whatever that base rate is.

The next sections walk through both pieces: the base rate tiers that apply to everyone, and the extra 0.5% that applies only to covered positions.

Every FERS employee’s base contribution rate depends on when they were hired. There are three tiers: original FERS, FERS-RAE, and FERS-FRAE. The tiers were set by the Bipartisan Budget Act of 2013, which raised contribution rates for newer hires.

Original FERS employees, generally hired before 2013, contribute 0.8% of pay. This is the lowest tier and applies to longer-tenured federal employees.

FERS-RAE, the Revised Annuity Employee tier, generally covers employees hired during 2013. They contribute 3.1% of pay, a meaningfully higher rate than the original tier.

FERS-FRAE, the Further Revised Annuity Employee tier, generally covers employees hired after 2013. They contribute 4.4% of pay, the highest of the three base tiers.

Covered law enforcement officers, firefighters, and air traffic controllers pay a flat extra 0.5% of pay on top of their base tier. The add-on is the same 0.5%, no matter which of the three base tiers applies to you.

So a covered employee’s total contribution is their base rate plus 0.5%. An original-FERS covered employee pays 1.3%. A FERS-RAE covered employee pays 3.6%. A FERS-FRAE covered employee pays 4.9%.

The add-on only applies to covered service. Time you spend in a special-provision position carries the extra 0.5%; time in a non-covered position does not, even within the same career.

The picture below shows the stack. Your base rate is the foundation, and the 0.5% special-provision add-on sits on top of it, the same way it does regardless of your tier.

Putting the two layers together gives the total rate a covered employee pays. The combination depends on your base tier: 1.3% for original FERS, 3.6% for FERS-RAE, or 4.9% for FERS-FRAE, each including the 0.5% special-provision add-on.

Most current law enforcement officers and firefighters fall in the FERS-FRAE tier, since it covers anyone hired after 2013. For them, the total contribution is 4.9% of pay, the highest combination.

Compare that to a non-covered FERS-FRAE employee, who pays only the base 4.4%. The 0.5-point gap between the two is the price of the enhanced pension and earlier retirement.

Your own rate depends on your hire date and your position. The table below lays out all six combinations so you can find yours.

We explain the trade-off rather than answer it for you. The extra 0.5% of pay reduces your take-home pay throughout your career. In exchange, you earn the enhanced 1.7% pension formula and the ability to retire years earlier than standard FERS allows.

The math runs in your favor over a full covered career for most employees. A few extra cents per dollar in contributions is small next to the larger pension and the value of retiring a decade or more earlier than a regular employee could.

The add-on is not optional. If your position is covered, the extra 0.5% is withheld automatically; it is not a choice you make each pay period. The decision that matters is whether to enter or stay in covered service in the first place.

How the trade-off weighs for you depends on your career plans, your finances, and how long you expect to serve in a covered position. There is no single right answer that fits everyone.

Start with your hire date and your position classification. Your hire date sets your base tier, and whether your position is covered sets whether the 0.5% add-on applies. Both pieces together determine your total rate.

Your payroll office has the authoritative answer. The percentage withheld from each paycheck for retirement should match your tier and coverage status, and your payroll or HR office can confirm both.

Watch for changes if your status shifts. Moving between covered and non-covered positions changes whether the 0.5% applies, even though your hire-date tier stays the same for your career.

There is no single right answer on career timing, since contribution rates are set by law rather than a choice you make. To see how your full retirement income fits together, run your free readiness score, then confirm your exact rate with your payroll office.