Government Provided Federal Retirement Contributions


All the people who are eligible for federal retirement are interested in knowing the amount of contribution that is being done by the federal government. It helps them to plan their finances in a better manner and assists them to be well prepared for the future. If you are also one of the people who are eligible for federal retirement contributions, you must read this article to get a handle on how things are vs. how people assume things to be. It might turn out to be an eye-opener.

federal employee retirement PSRetirement helps federal employees maximize their retirement through education, knowledge and proper planning.

The Statement on Federal Retirement Contributions

A report by Heritage foundation stated that the federal government contributes up to 18 percent of a federal employee’s pay for federal retirement. Some people analyzed the contributions they are getting and the results they got were below 18 percent. So were they wrong in doing the math? Let’s find out by digging out some facts.

What’s Included in Federal retirement Contributions by the Government?

Once you understand about the factors included while stating that federal government contributes 18 percent of the employee salary in federal retirement, you might get some clarification. Therefore, we should have a look at the included factors first.

OPM has estimated that the total contribution made by the government to the federal retirement or federal employees’ retirement system is 13.2 percent for the employees who were recruited before the year 2014. This 13.2 percent is achieved by reducing 0.8 percent employee contribution from 14.0 percent costs.

OPM also estimated that the contribution is 11.1 percent the employees that were hired either in 2014 or even later than that. It includes 3.1 percent employee contribution. It is pertinent to add here that an additional 1.3 percent contribution by the employees goes towards paying the CSRS obligations that are unfunded.

It should also be mentioned that all the federal employees get an automatic 1 percent contribution to their thrift savings plan by the federal government. It can even be up to an additional 4 percent in matching contributions.  Considering all these factors, the total government contributions can indeed be from 15.1 percent to a maximum of 18.2 percent.

Total Compensation of Federal Employees including Federal Retirement Contributions

The contribution of the federal government to the financial compensation of all the federal employees is considerably higher than the salary earned by each federal worker. The overall compensation package includes several other items and contributes to computations. The average federal employee’s total compensation that includes all the salary and benefits is more than $123,000.


It is hoped that the aforementioned explanation would act as a guide to all the federal workers who are confused about government contributions to the federal retirement. The explanation is as simple as it can be and includes all the vital points that will help the federal employees to plan their retirement in a better manner. It will also throw a light on the facts which may motivate some federal employees to stop worrying so much if the government is already contributing 18 percent to their federal retirement.

In contrast, some federal employees who had a misconception that the federal government contribution towards their federal retirement is high and didn’t save up much might get face the reality and start saving up better rather than relying solely on the federal retirement system only. No matter how much contribution you are making as a federal employee or how much the government is paying to boost your federal retirement, it is always advised to not put all your eggs in one basket and look for multiple sources of income in retirement. It would save you from the embarrassing and highly uncomfortable situation of running out of money in retirement. Won’t you agree?

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