What It Means To Be FERS RAE Or FERS FRAE

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By on August 19, 2019 in Retirement with 0 Comments
document on a desk labeled 'retirement plan' next to a $100 bill, pen and reading glasses

An important part of being a federal employee is your retirement system. During federal employment you pay into a retirement system that will provide you with a pension and health coverage amongst other aids.

Most federal employees are familiar with the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS), but many may not know that two new retirement systems were introduced in 2013 and 2014. These two retirement systems are for FERS Revised Annuity Employees (FERS RAE) and FERS Further Revised Annuity Employees (FERS FRAE).

FERS RAE

FERS employees hired on or after January 1, 2013, but before January 1, 2014, are generally considered FERS Revised Annuity Employees (FERS RAE). The distinguishing feature of a FERS RAE: they pay 3.1% into the federal retirement system instead of the usual .8% of a regular FERS. 

FERS FRAE

In general, FERS employees hired after December 31, 2013, are considered FERS Further Revised Annuity Employees (FERS FRAE). FRAEs pay 4.4% into the federal retirement system instead of the .8% of a regular FERS. 

It is important to note that both FERS RAE and FERS FRAE do not experience any changes to annuity computation or retirement eligibility.

Unfortunately, despite the increase in cost, there is not an increase in benefits. The chart below spells out the differences between these three retirement systems:

FERSFERS RAEFERS FRAE 
Hire Date:On or after January 1, 1984On or after January 1, 2013, but before January 1, 2014After December 31, 2013
Contribution Rate:0.8%3.1%4.4%

If you worked in federal service, left, and came back on or after January 1, 2013, you may fall under an exception to the rules listed above. Per OPM, if an employee “as of December 31, 2012, had performed at least five years of civilian service creditable or potentially creditable under FERS, including service subject to CSRS or CSRS-Offset,” that employee would not be covered by FERS RAE. In this case, you would be covered under whichever retirement system you originally had – FERS, CSRS, or CSRS-Offset.

© 2019 Brandon Christy. All rights reserved. This article may not be reproduced without express written consent from Brandon Christy.

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About the Author

Brandon Christy, CPA, PFS, is the founder and president of Retirement Benefits Institute, Inc. He is an established leader in contracted federal retirement benefits education, and his company has trained over 10,000 federal employees to help them gain clarity and confidence in retirement.

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