Are you a new government employee? If so, understanding the retirement and federal benefits available to you is essential. Retirement and federal benefits are an important part of your employment package, and they can have a significant impact on your financial security in the future.
Knowing what you need to do to take advantage of them can help you make the most of your government job. In this article, we will look at what new government employees need to know about the retirement and federal benefits they are eligible for.
What Steps to Take as a New Federal Employee
Federal benefits provided to government employees can provide security and peace of mind for their future.
As a new governmental employee, there are some decisions that you will need to make, most of which fall within 31 to 60 days from your entry date.
We outline a few of these benefits and their deadlines below.
Step #1: Sign Up for Benefits
Health Insurance
The Federal Employees Health Benefits (FEHB) Program is a fantastic benefit of being a federal employee. But coverage is NOT automatic. You must enroll in one of the health plans within 60 days to be covered.
If you don’t choose a plan, you are considered to have declined coverage and will need to wait until the next Open Enrollment Period to enroll.
Dental & Vision
The Federal Employees Dental and Vision Insurance Program (FEDVIP) is available to eligible Federal and Postal employees, retirees, and certain uniformed service members and their families.
Eligible employees have 60 days to enroll after they become eligible.
Flexible Spending Accounts
The Federal Flexible Spending Account Program (FSAFEDS) allows you to pay for some health and dependent care expenses with your pre-tax dollars.
There are three types of Flexible Spending Accounts offered by FSAFEDS:
- Health Care FSA
- Limited Expense Health Care FSA
- Dependent Care FSA
You have 60 days from your employment start date to sign up for an FSA or until October 1st, whichever comes first.
Life Insurance
If you are in a FEGLI-eligible position, you will automatically be enrolled in basic life insurance. It will be effective on the first day that you start employment unless you waive this coverage before the end of your first pay period.
You have 60 days from the entry date to sign up for any optional life insurance.
Long-Term Care Insurance
You (and your spouse, if you are married) have 60 days from your employment date to apply for long-term care insurance.
If you apply after the 60 days, you will have to use a different underwriting application which is much longer with numerous health-related questions, as well as a possible interview with a nurse or a review of your medical records.
Step #2: Review Retirement Options
Retirement
Most new employees are automatically enrolled in the Federal Employees Retirement System (FERS). FERS is a three-tiered retirement plan which includes:
- Social Security Benefits
- Basic Benefit Plan
- Thrift Savings Plan
You will pay full Social Security taxes and a small contribution to the Basis Benefit Plan. In addition, your federal agency will set up a Thrift Savings Plan account for you and will automatically contribute an amount that is equal to 1% of your basic pay each pay period.
These automatic contributions are not taken out of your salary and will be made whether you contribute your own money to the TSP.
Further, you can make tax-deferred contributions to the TSP and a portion will be matched by the Government.
Step #3: Review Vacation and Leave
Leave
As a federal employee you will earn sick and annual leave during each pay period.
Annual leave is used for vacation and personal emergencies.
- Full-time employees earn 4 hours of annual leave every pay period of 2 weeks
- After 3 years, this increases to 6 hours.
- After 15 years, this increases to 8 hours.
Sick Leave is used for:
- Personal medical needs
- Care of a family member
- Adoption related purposes
Full-time Federal employees earn 4 hours of sick leave every 2 weeks. You can accrue this leave without a limit.
Step #4: Name a Beneficiary
If you pass away while you are a federal employee, payments will be made in a particular order set by law for:
- Life insurance
- Unpaid salary
- Thrift Savings Plan Funds
- Retirement funds
Standard rules determine who is eligible to receive these payments, and you do not need to act if you are happy with the order payment for that program. If you want the funds to go to someone else, you will need to file a Designation of Beneficiary for that program.
Read More > What Every Young Federal Employee Should Know
Have Questions About Federal Benefits?
We know that getting a job in the Federal government takes a lot of determination, and once you get there, you’ll want to take advantage of all the benefits available to you. Our team at Federal Educators can walk you through all you need to know about federal benefits and retirement.
Reach out to us at 813-755-7037 or fill out our form online to get in touch with one of our professionals today.
