Federal employment offers one of the most comprehensive benefits packages available from any employer in the United States. When evaluating a federal job offer, the benefits often add 30-40% on top of your base salary in total value.
Federal Employees Health Benefits (FEHB)
FEHB is one of the most valued federal benefits. The program offers hundreds of health insurance plans — including PPO, HMO, and high-deductible options — from major carriers nationwide. The government pays approximately 70-75% of the premium, making coverage significantly more affordable than most private sector plans. You can keep FEHB coverage into retirement if you have been enrolled for the 5 years immediately preceding retirement.
Federal Employees Retirement System (FERS)
FERS is a three-component retirement system. The Basic Benefit Plan provides a defined pension calculated as 1% (or 1.1% if you retire at 62 with 20+ years of service) multiplied by your years of service multiplied by your "high-3" average salary. Social Security provides standard benefits based on your earnings record. The Thrift Savings Plan (TSP) is the third component and works like a 401(k).
Most federal employees can retire with an immediate annuity at their Minimum Retirement Age (typically 57) with 30 years of service, or at age 60 with 20 years, or at age 62 with 5 years.
Thrift Savings Plan (TSP)
TSP is essentially a government 401(k) with incredibly low expense ratios — often under 0.05%, far below most private sector retirement plans. The government automatically contributes 1% of your salary and matches up to an additional 4%, giving you a total of 5% employer contribution if you contribute at least 5% yourself.
TSP offers several fund options including the G Fund (government securities), F Fund (bonds), C Fund (S&P 500 index), S Fund (small/mid-cap), I Fund (international), and L Funds (lifecycle/target date). The contribution limits mirror 401(k) limits.
Paid Leave
Federal employees earn generous paid time off. Annual Leave accrues at 4 hours per pay period (13 days/year) for the first 3 years, 6 hours per pay period (20 days/year) for years 3-15, and 8 hours per pay period (26 days/year) after 15 years. Sick Leave accrues at 4 hours per pay period (13 days/year) with no limit on accumulation. Federal employees also receive 11 paid federal holidays per year.
Additional Benefits
Federal Employees Group Life Insurance (FEGLI) provides basic coverage at very low cost. The Federal Long Term Care Insurance Program helps cover nursing home and home care costs. Federal employees get access to flexible spending accounts for health care and dependent care. Many agencies offer transit subsidies, telework programs, flexible work schedules, student loan repayment assistance (up to $10,000/year), and tuition reimbursement programs.
The Total Value
When you add up FEHB, FERS pension, TSP matching, generous leave, and all additional benefits, the total compensation package often exceeds what a comparable private sector position offers — even if the base salary is somewhat lower. For long-term career planning, federal benefits are exceptionally strong.