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United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter

Number 14 - 102 Date: 01/30/2014

Subject: Federal Employees Retirement System- Further Revised Annuity 

Employees (FRAE) 

Purpose: The purpose of this Benefits Administration Letter (BAL) is to provide interim 

guidance concerning employees and Members of Congress who will be covered under 

the Federal Employees Retirement System (FERS) as Further Revised Annuity Employees 

(FRAE), FERS-FRAE. This guidance only applies to automatic FERS coverage 

determinations. Employees who are subject to CSRS, CSRS-Offset, or FICA-only 

coverage and who have an opportunity to elect to transfer to FERS will be subject to 

FERS, not FERS-FRAE, if they elect to transfer to FERS. 

Background: Section 401 of the “Bipartisan Budget Act of 2013,” signed into law by 

the President on December 26, 2013, makes another change to the Federal Employees’ 

Retirement System (FERS). Beginning January 1, 2014, new employees (as designated in 

the statute) will have to pay higher employee contributions, an increase of 1.3 percent 

of salary above the percentage set for the FERS Revised Annuity Employee (RAE). 

Section 8401 of Title 5, United States Codes, has been amended to add a new definition 

of a FERS-FRAE employee. With one exception, there is no difference in the FERS basic 

benefit paid to FERS, FERS-RAE, and FERS-FRAE employees. (The FERS basic benefit for 

congressional employees and Members of Congress under FERS-RAE and FERS-FRAE is 

different than the basic benefit paid to those groups under FERS.) 

Interim Guidance: 

We have established new retirement plan codes for FERS-FRAE employees (see chart 

below). We anticipate that agencies will need time to add these new retirement plan 

values to their HR and payroll systems and that these new codes will not be immediately 

available to use for new employees hired beginning January 1, 2014. We are currently 

developing guidance to assist agencies in determining the appropriate retirement plan 

coverage for former FERS and FERS-RAE employees who are rehired into the 

Government on and after January 1, 2014. Until agency systems are updated and until 

we issue additional guidance on the retirement coverage rules, please follow the 

guidance provided in BAL 13-102, dated June 4, 2013 (http://www.opm.gov/retirementservices/publications-forms/benefits-administration-letters/2013/13-102.pdf), to 

process new employees hired after December 31, 2013, and rehired former FERS and 
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FERS-RAE employees hired after December 31, 2013, placing them in FERS or FERS-RAE. 

Please advise all new employees that adjustments to the retirement deductions 

retroactive to their date of appointment will need to be made after agency systems are 

updated with FERS-FRAE codes, additional guidance from OPM is issued, and their 

retirement plan codes are changed to FERS-FRAE. 

In addition, it should be noted that amendments made by the Section 401 of the 

Bipartisan Budget Act of 2013 provides that contributions be paid for FERS-FRAE 

employees that are in excess of the normal cost percentage. However, the U.S. Postal 

Service and Postal Regulatory Commission are not included in this provision, and the 

percentages that will be paid by U.S. Postal Service and Postal Regulatory Commission 

are 1.3 percent lower than shown in the table below. 

FERS FRAE Codes and Employee and Agency Contribution Rates 

Category

FERS FRAE Contribution Rates (%)

Retirement 

Plan Code

Normal Cost 

%

Employee 

%

Agency 

%

Regular KF 12.7 4.4 9.6

Law Enforcement Officer, 

Firefighter, Member of the 

Supreme Court Police 

MF 27.6 4.9 24.0

Air Traffic Controller LF 27.3 4.9 23.7

Military Reserve Tech NF 15.7 4.4 12.6

Customs and Border 

Protection Officers

OF 27.6 4.9 24.0

Employees under section 

303 of the CIA Act of 1964 

(when serving abroad)

18.0 4.4 14.9 

Member of Congress 12.7 4.4 9.6

Member of Capitol Police 18.0 4.9 14.4

Congressional Employee, 

Civilian Capitol Police 

Employee

12.7 4.4 9.6

 
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The new Retirement Codes and definitions have been determined and are provided 

below: 

CODE DEFINITION

KF Federal Employees' Retirement System (FERS) Further Revised Annuity Employees 

(FRAE) and FICA. COMBINATION OF FICA AND FERS-FRAE: Full deductions are 

withheld for FICA, and partial deductions are withheld for another system. FERS 

(FRAE) FICA

LF FERS, Further Revised Annuity Employees (FRAE) and FICA--Air Traffic Controllers. 

COMBINATION OF FICA AND FERS-FRAE: Full deductions are withheld for FICA, and 

partial deductions are withheld for another system. FERS (FRAE) ATC

MF FERS, Further Revised Annuity Employees (FRAE) and FICA--Special. COMBINATION OF 

FICA AND FERS-FRAE: Full deductions are withheld for FICA, and partial deductions are 

withheld for another system. FERS (FRAE) Special

NF FERS, Further Revised Annuity Employees (FRAE) and FICA--Reserve Technicians. 

COMBINATION OF FICA AND FERS-FRAE: Full deductions are withheld for FICA, and 

partial deductions are withheld for another system. FERS (FRAE) RT

OF FERS, Further Revised Annuity Employees (FRAE) and FICA-- Customs and Border 

Protection Officers. COMBINATION OF FICA AND FERS-FRAE: Full deductions are 

withheld for FICA, and partial deductions are withheld for another system. FERS 

(FRAE) CBPO

DF FSPS-Further Revised Annuity Employees (FRAE)--Law Enforcement (FSPS-FRAE--Law 

Enforcement). COMBINATION OF FICA AND PARTIAL DEDUCTIONS: Full deductions are 

withheld for FICA, and partial deductions are withheld for another system. FSPS 

(FRAE) LEO

PF FSPS-Further Revised Annuity Employees (FRAE) and FICA. COMBINATION OF FICA 

AND PARTIAL DEDUCTIONS: Full deductions are withheld for FICA, and partial 

deductions are withheld for another system. FSPS (FRAE)