Federal retirement contribution effect
How FERS Contributions Change Effective Compensation
The 2026 Rest of U.S. GS-12 step 1 salary is $89,508. Applying the model's 4.4% FERS-FRAE employee contribution for a newly covered regular employee reduces the selected after-FERS value by $3,938 to $85,570.
ActualForecastAssumptionInterpretation
Last reviewed August 22, 2026
What the numbers show
- FERS withholding is not a tax; it purchases retirement coverage and should not be described as money with no value.
- The workbook lets users select gross GS salary or a new-hire after-FERS basis.
- Contribution rates differ by coverage cohort, so the new-hire scenario does not describe every current employee.
2026 GS-12 step 1 example
| Measure | Value | Classification |
|---|---|---|
| Published Rest of U.S. salary | $89,508 | Actual |
| FERS-FRAE employee rate | 4.4% | Actual rate applied as assumption for a new hire |
| Modeled employee contribution | $3,938 | Calculation |
| After-FERS comparison value | $85,570 | Modeled comparison basis |
Coverage cohorts matter
OPM describes regular FERS employee contributions of 0.8%, FERS-RAE contributions of 3.1%, and FERS-FRAE contributions of 4.4% for the covered groups summarized in its earned benefits trust fund material.
What the model does; and does not; say
The after-FERS view isolates one required employee contribution. It does not subtract federal or state income tax, Social Security, Medicare, health insurance, TSP contributions, or other deductions. It also does not add the actuarial value of the pension benefit.