The savings plan allows employees to save up to 10 percent of salary for retirement. The Government contributes 1 percent of salary to employees who do not contribute and will match up to another 4 percent of savings for employees who do contribute. Because the savings plan is tax deferred, no income tax is due on either the employee's contributions or the Government matching funds, or the earnings on those amounts, until retirement. A broader selection of investment funds is planned for the near future. The Government pays one-third of the cost of this group term insurance.
Employees can also purchase Optional insurance at their own expense.
Optional coverage includes additional insurance on the employee's life as well as coverage for the employee's spouse and eligible children. Accelerated death benefits are available to terminally ill enrollees so that they can receive life insurance proceeds while they are living. Many large organizations are cutting life insurance benefits to retirees. This is not the case in the Federal Government, which allows life insurance to be continued into retirement. Insurance can also be converted to private coverage upon employment termination, without proof of insurability.