If you are lucky enough to have access to it at the agency where you work, there is a document available to some federal employees that can help them better understand their pay and benefits. This document is the Total Compensation Statement (TCS).
This document is designed to provide information about your direct cash compensation as well as the various federal benefits you’re receiving or for which you are eligible.
It shows how much salary you are paid directly and assigns a dollar value to your benefits as a federal employee.
I find the most value in the specific details provided about various federal benefit programs, i.e. FERS annuity estimates, TSP balances, FEHB premiums, FEGLI coverage, etc.
Where Do You Get a Total Compensation Statement?
Unfortunately, the TCS is not widely available. According to the Office of Personnel Management (OPM), it is part of the Government Retirement & Benefits (GRB) Platform which is not something that every federal employee will have access to because each agency has discretion to use this platform (or not) depending on its needs and budget and as such it will vary for each agency. But for federal employees who do have access to the TCS, it can provide them with useful information about their salary and benefits. You can contact your HR and/or payroll offices to find out if you have access.
Please check out the video I created for a walkthrough of a total compensation statement and insight on how to think about your federal benefits.
The TCS shows a summary of your compensation and information related to:
- Federal Employee Health Benefits (FEHB)
- Federal Employee Group Life Insurance (FEGLI)
- Federal Employee Vision and Dental Program (FEDVIP)
- Federal Long Term Care Insurance Program (FLTCIP)
- Flexible Spending Accounts (FSA)
- Workers Compensation Benefits – Federal Employee’s Compensation Act (FECA)
- Social Security
- Thrift Savings Plan (TSP)
- Federal Employee Retirement System (FERS)
This post may provide an example of how statement sections are likely to look like and a short breakdown of the various programs.
Let’s take a look.
Federal Employee Health Benefits Program (FEHB)
If enrolled in FEHB, details surrounding the health insurance plan available to federal employees will show up here.
Current FEHB Enrollment
|Plan Name||Blue Cross Blue and Blue Shield Service Benefit Plan Standard Option|
Premium per Pay Period
The agency will contribute up to 75% of the total premium cost while employed. Employee premiums are paid with pre-tax dollars.
You may enroll, make changes, or cancel during Open Season or upon experiencing a qualifying life event.
Federal Employees’ Group Life Insurance Program (FEGLI)
FEGLI is the group term life insurance coverage available to federal employees. This section shows if you are currently covered and how much coverage you have.
There is a basic option plus three forms of optional coverage. Employees are automatically enrolled in the basic option unless they opt out. While there is no open season for FEGLI qualifying life events may serve as opportunities to enroll or increase coverage amounts.
Current FEGLI Enrollment
|Basic Life Insurance||1x salary rounded up to next $1,000 + $2,000|
|Option A Standard||Fixed amount of $10,000|
|Option B Additional||Multiple of basic pay; may elect up to 5 times max.|
|Option C Family||$5,000 spouse, $2,500 child – may elect up to 5 times this amount.|
Premium per pay period
|Basic Life Insurance||$|
|Option A Standard||$|
|Option B Additional||$|
|Option C Family||$|
The Agency pays one-third of the premium for Basic Life Insurance and the employee pays the rest. Employees are also responsible for the full premium of any optional insurance elected.
FEGLI is an age-banded group life insurance program – meaning premiums automatically increase as you hit higher age groups.
The biweekly cost of Option A (standard) coverage is:
*Current rates from the OPM website.
The biweekly cost*per $1,000 of Option B coverage:
|Age Group||Biweekly, per $1,000||Monthly, per $1,000|
|80 and over||$2.88||$6.240|
*Current rates from the OPM website.
The takeaway: FEGLI is a great way to get intro-level coverage for your family, however, it becomes very expensive in the higher age bands.
Take time to evaluate your goals for insurance and review all the options available to you, including FEGLI and independent policies, to find the right coverage.
Federal Employees Dental and Vision Insurance Program (FEDVIP)
FEDVIP allows employees to purchase dental and vision coverage without limitation for preexisting conditions. Enrollment or changes can generally be made during federal benefits Open Season or upon experiencing a qualifying life event.
Premium per Pay Period
Federal Long Term Care Insurance Program (FLTCIP)
FLTCIP is an employer-sponsored group long-term care insurance program sponsored by OPM and administered by FedPoint on behalf of the insurance company John Hancock.
Underwriting applies to all applicants outside of new hires, and employees must be eligible for FEHB to qualify.
The long-term care insurance market has changed significantly over the past ten years, and many insurers have raised premiums for policyholders. In fact, FLCTIP had a large premium increase a few years ago.
There are no pricing discounts or agency subsidies that apply to purchasing long-term care through FLTCIP vs. buying private coverage. The biggest advantage may be waived underwriting for new hires, however many factors determine the right time to enroll.
As long-term care insurance evolves with new options, including hybrid policies that leverage life insurance or annuities, it’s smart to give considerable thought before making a decision.
Note, however, that OPM has suspended FLTCIP applications for new enrollees as of December 19, 2022.
Premium per Pay Period
Flexible Spending Accounts (FSA)
FSAs can be useful in tax planning. Contributions are made with pre-tax money and when used for eligible expenses those dollars are not taxed. By avoiding income tax, you take home more money.
Employees can enroll if they are eligible for FEHB. Three FSAs are offered to employees:
A Health Care FSA (HCFSA) is a pre-tax benefit account that can be used to pay for eligible medical expenses that are not otherwise covered by a health plan.
The current maximum amount you can contribute to an HCFSA is $3,050 per individual FY 2023. Eligible employees can carry over a small amount to the following plan year.
A Dependent Care FSA (DCFSA) is a pre-tax benefit account that can be used FOR eligible dependent care expenses such as preschool, camps, after-school care, and child or adult daycare.
You can contribute up to $2,500 per year as an individual and up to $5,000 if you are married and filing a joint tax return for FY 2023. If you have kids under age 13 and are paying for care, don’t leave these tax savings on the table.
A Limited Expense Health Care FSA (LEXHCFSA) is a pre-tax benefit account that can be used to pay for eligible dental and vision expenses if you are enrolled in a high-deductible health plan with a health savings account.
With an FSA you may benefit by using pre-tax money for eligible expenses. The downside is that most of the funds must be used by year-end; only a small amount may roll over to the following year.
*Check out more details at FSAFEDS.com
Allotment per Pay Period
If you have the type of expenses that any of the 3 FSA options cover, review your enrollment.
Workers’ Compensation Benefits – Federal Employees Compensation Act (FECA)
The Federal Employees’ Compensation Act provides compensation benefits for Federal employees for work-related injuries or illnesses.
- Wage Replacement
- Payment for medical care
- Medical and vocational rehab assistance in return to work
Survivor benefits for eligible dependents may also be available. Please review your statement for more information.
Old-Age, Survivors, and Disability Insurance (OASDI) is the formal name for Social Security.
This section of the Total Compensation Statement serves as a general reminder to check your benefits statement at SSA.GOV for your earnings record and benefit estimates.
While often dismissed, Social Security plays a pivotal role in retirement income planning. Take care to make important decisions on when to claim social security for your situation.
Thrift Savings Plan (TSP)
The TSP account can play a big part in your retirement benefits. You may make traditional (pretax) or Roth (after-tax) contributions to the Thrift Savings Plan and invest those funds in various investment options for potential long-term growth.
The maximum plan contributions limits FY 2023:
- +$7,500 catch-up over age 50
TSP Account Balances
This box shows how much you have allocated between both Traditional & Roth accounts as well as your overall account balance.
TSP Investment Funds
|Fund||Allocation||Traditional Balance||Roth Balance|
|L fund 2065||%||$||$|
|L Fund 2060||%||$||$|
|MORE L FUNDS….||%||$||$|
The next section is intended to show a breakdown of your current investment allocation between funds. However, I have often found this information to be inaccurate, make sure to check your TSP statement or online account for the most up-to-date investment information.
Determining the right investment mix is unique to you, considering factors like time horizon, risk tolerance, and overall goals for the future. For example, if you have goals for growth yo will need to be invested differently than someone looking for security and income. Your investment mix should reflect this.
I prefer to develop a custom mix of the 5 core funds that TSP offers and to steer clear of the L funds. Make sure to review your account at least once per year or more often, and rebalance when needed.
Estimated Annuity Based on Current Value
|Type of Annuity||Monthly Amount|
You also have the option to convert your TSP account funds into an annuity payment in the future. TSP uses MetLife for this service and it’s similar to what you might find buying an annuity in the open market.
Giving control of your hard-earned dollars to an annuity and insurance company is a big decision. Other options to design an income stream for retirement may offer a better solution.
Contributions per Pay Period
How much are you currently contributing to your TSP?
Agency contributions are worth up to 5% of your salary each year. Make sure you’re getting this added piece of compensation.
The more you contribute to the TSP, the more potential opportunity for growth. It is also important to consider utilizing different account types when building a retirement income plan. Tax-efficient retirement income strategies often combine Traditional, Roth, and Taxable accounts.
Bottom line: the TSP is important – use it for tax benefits and long-term growth potential, and be sure to make smart choices about how much you contribute, the mix of account types, your investment selection, and rebalancing periodically.
Federal Employee Retirement System (FERS)
A pension can be a powerful thing, and today defined benefit plans are no longer common. The FERS annuity is a guaranteed retirement income stream that federal employees are entitled to upon meeting age and service requirements.
Current Retirement Information
|Retirement Coverage (Code)||FERS|
|Employee Contribution Rate||%|
|Service Computation Date||01/01/2001|
Make sure your service date is accurate in this section.
Estimate of Monthly Retirement Benefits
|Retirement Date||Age||Type||Annuity (No Survivor)||Annuity (Max Survivor)||Max Survivor Benefit||Annuity Supplement|
This table will show estimates based on different types of retirement. Length of service, your high-3, survivor benefit elections, and other variables are used in calculating these estimates.
- Early/DSR – If approved for Voluntary Early Retirement Authority (VERA) or forced out under a Discontinued Service Retirement (DSR).
- MRA +10 – Upon reaching Minimum Retirement Age with at least 10 years of service may be eligible for a reduced voluntary annuity.
- Unreduced – Minimum Retirement Age (MRA) with 30 years, age 60 with 20 years, or age 62 with 5 years, or under special provisions.
- Disability – Must meet all qualifying requirements and be approved by OPM.
- Death – A surviving spouse may be eligible for a survivor annuity if you have at least 10 years. There are also children’s survivor benefits and a basic employee death benefit that may apply.
An annuity supplement is also payable if you retire on an immediate annuity under age 62. It’s available to begin at MRA (or earlier under special provisions) and ends at age 62, the supplement is subject to an earnings test.
It’s important to consider the FERS annuity estimates within your TCS are not indexed for future pay increases or inflation.
|Annual Leave Balance (hours)||hours|
Finally, there is your Annual Leave Lump-Sum Payment information. When you separate or retire, you will receive a lump-sum payout based on your annual leave balance. That estimate is listed here.
Now it’s time to check if your agency provides a Total Compensation Statement and update your financial plan!
I hope this brief article provides some insight. If you’d like to talk about your situation and your retirement plan, I’d love to hear from you.
I also publish a biweekly newsletter with insights into topics like this and more. If you’d like to join the list, please subscribe here.
*The content is developed from sources believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.