Federal Employees Update
June 23, 2025
The Senate Committee on Homeland Security and Governmental Affairs: Contains a provision that would reestablish the authority for a president to reorganize government, provided the plan does not increase the size of federal agencies or federal spending. Unlike previous reorganization authorities, where Congress had a certain amount of time to either approve or disapprove of the plan, determining whether the president’s plan could be put in place, this provision does not carve out a role for Congress.
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
FREE FERS Retirement Readiness
FERS Related Classes
Series: Guide to Your FERS Benefits
Financial Readiness in Retirement
Understanding Defined Contribution Plans
Understanding Social Security
You may be old enough to retire, but do you feel ready?
Recent surveys show that today's pre-retirees and retirees are less financially prepared to retire as compared to previous generations. When asked, boomers say they need $1.1 million to comfortably retire, but the median retirement savings is only $120,000. Achieving retirement readiness requires being smarter about retirement decisions. Let us help you navigate these choices.
Our topics are presented as micro-webinars and are designed for you to understand key concepts. Most importantly, they are combined with actionable checklists and other resources, so you can move forward in your choices. Right now.
Learn. Apply. Relax.
Award Winning Content at Your Fingertips. Literally.
Metamorphosis is thrilled to announce that we have been named as Runner-Up in the 2024 Money Inclusion and Awareness Awards. Selected out of a field of entries from 35 countries, this award is a recognition of the importance of who Metamorphosis serves and the importance of what we do. We thank you for being here!
At Metamorphosis, we believe that action is critical. That's why we have developed the 30-Day Financial Clarity Challenge.
Click the link below to log in and participate in the challenge. For less time per day than it takes to enjoy a cup of coffee, you can spend 30 days learning more about your finances and readiness to meet challenges. And then you can go do something you love to do!