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Federal Employees Update
June 17, 2025

Although Senators are still hard at work debating all of the provisions in the BBB, indications right now are a key provision that would affect current federal employees is OUT (the Supplemental Annuity stays intact), however, new employees will pay substantially higher contributions to FERS, even if they elect 'at-will' employment.

This sets up a fight between the House and the Senate. As such, we're keeping the House provisions (below) up, but will continue to monitor and post changes.

Below are the FERS proposals contained in the House budget bill:

  • Increased FERS annuity contributions OUT for current employees hired before 2014 with a lower contribution percentage, IN for new employees (no date), depending on their at-will employment election

  • Supplemental Annuity takes effect on January 1, 2028, but anyone who is entitled* to the supplement prior to that is grandfathered in; employees who are part of an ‘early retirement’ (i.e., VERA) are also protected

  • The change from High-3 to High-5 for annuity calculations has been removed from the House version

  • FEHB changes have already been removed


*’Entitled’ is the language used in the U.S. Code describing the Retiree Annuity Supplement (RAS); it references an employee having met the service and age requirements to retire, thus being ‘entitled’ to the RAS

Are you a federal employee trying to figure out how to put the FERS puzzle pieces together, especially in these trying times? Here are five ideas:

  • Keep checking this page for updates on the FERS-related provisions in the 2025 Budget Bill.