Federal Pay

Voluntary benefits to keep federal employees and retirees protected. Learn how United Benefits can help your firm with exclusive product offerings.

When helping federal workers with financial planning, conversations are often focused on benefits that the government provides their employees: the FERS pension, TSP management, Social Security strategy, and FEGLI. While these are essential components of a federal employee’s long‑term financial picture, they mostly are involved with retirement and estate planning . Active federal employees, including those in the early and middle stages of their careers, also face immediate financial vulnerabilities that these standard benefits don’t address.

That’s where voluntary benefits come in. Often overlooked, voluntary benefits can offer real solutions for active feds, create opportunities for advisors to build stronger relationships, and fill in gaps that usually aren’t covered by their employee benefits.

Partnering with United Benefits

Fed Options has partnered with United Benefits to offer products and policies that provide these voluntary benefits for feds. Because their approach aligns with that of Fed Options and the federal community, we are super excited to be affiliated with a company that has over 30 Years experience serving the Federal workforce.

United Benefits voluntary policies are designed around the exact gaps federal employees face.

United Benefits provides training, support, and product access for advisors. You can schedule time directly with John Witten to learn how these offerings fit into your client conversations.

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How Voluntary Benefits Can Fill Potential Gaps in Federal Benefits

Many federal employees are still years away from retirement. They’re not ready to move TSP assets, but they are ready to make decisions about life insurance, disability coverage, and family protection. When the price point matches the provided benefit and the application process isn’t arduous, it’s practically a win-win for all involved.

Here are some of the holes in coverage that voluntary benefits can help fill:

FEGLI’s Cost and Underwriting Challenges

FEGLI provides valuable baseline coverage, but it is limited and those limitations become more pronounced over time:

Option B becomes prohibitively expensive with age, especially as employees approach retirement.
Private life insurance alternatives often require full underwriting, long applications, and the risk of rate changes, which is often a major deterrent for both advisors and clients.
FEGLI also has limited options for spouses, children, and dependents, leaving many families underinsured.

Among other limitations, it’s worth noting that the maximum coverage amounts for FEGLI were set between the 1950s and early 1980s and haven’t been reset for inflation. Private life insurance solutions, however, offer a streamlined, predictable alternative that fits naturally into life insurance discussions.

The Problem with Sick Leave: No Short‑Term Disability for Feds

Federal employees do not have employer‑provided short‑term disability coverage. Their only buffer is accumulated sick leave, which is often insufficient should a major medical event occur. This can lead to income loss, financial strain, and delayed recovery. For this reason, it’s hardly a surprise that disability insurance is the #1 voluntary benefit purchased by federal employees.

Voluntary disability coverage fills this gap directly, solving problems that FEHB and FERS do not address.

Guarantee‑Issue Disability Insurance

Disability coverage is one of the most impactful voluntary benefits for federal employees:

Protects income during medical leave
Available through payroll deduction
Requires no underwriting, making it easy to implement

For advisors, it’s a straightforward way to provide immediate value to clients who may be years away from retirement.

Advisor Strategy: How Voluntary Benefits Create Clients Today

Once you’ve helped a federal employee protect their family or income, you become their go‑to advisor. That trust compounds over time:

Email drips become more effective
Birthday reminders and check‑ins feel more personal
You get the first call when they’re ready to move TSP assets or discuss retirement income planning

White House released budget suggestions for upcoming fiscal year and no civilian pay raise was mentioned for second year in a row, 5 to 7 percent was suggested for military members.

2027 Pay Raise for Federal Employees: Military vs. Civilian

The White House has released its FY 2027 budget proposal on Friday, April 3rd and once again, civilian federal employees were not included in the administration’s recommended pay adjustments. While the budget calls for a 5–7% raise for military members, it also proposes a 10% cut to non‑military discretionary spending, a signal that civilian pay is not a priority for the second year in a row.

Here’s the full breakdown of what this means, what it doesn’t, and what to watch for next.

No Civilian Pay Raise in 2027 Budget Request

This is now the second year in a row that the administration has omitted a civilian pay raise from its budget request. However, it is important to note that this did not prevent a raise last year from materializing, the president signed an executive order in December that gave a 1 percent across-the-board raise to civilian federal workers while Congress enacted a 3.8% raise for some law enforcement personnel and active military members.

The budget proposal is influential, but it is not binding. Civilian pay is typically finalized through one of two channels:

Congressional action (rare)
Executive Order (common)

The FAIR Act proposed a 4.1% raise for federal employees in 2027, but similar acts have never made it through the House of Representatives in recent history and it is as unlikely this year to get through Congress along with the President’s approval. The White House suggested slashing nonmilitary federal spending by 10% in the upcoming fiscal year and a large civilian pay increase would not align with those spending goals.

Military Raise vs. Civilian Federal Pay Raise Historical Chart

The FY 2027 proposal includes a 5–7% raise for military members and 0% proposed raise for civilian feds This contrast is politically significant but not unprecedented. Military pay raises are often treated separately from civilian adjustments, and the absence of a civilian raise in the budget does not preclude one later. The disparity between the two numbers is a little unusual, though.

Year	Military Raise (Basic)	Civilian Raise (GS)
2027 (prop.)	4.10%	???
2026	3.80%	1.00%
2025	3.00%	1.70%
2024	5.20%	4.70%
2023	4.60%	4.10%
2022	2.70%	2.20%
2021	3.00%	1.00%
2020	3.10%	2.60%
2019	2.60%	1.40%
2018	2.40%	1.40%

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What Happens Next?

Congressional Budget Negotiations (Summer 2026)

Congress could legislate a raise, but historically they defer to the executive process unless making a political point. If it were to occur via Capitol Hill, it would likely be packaged in the fiscal year budgetary talks over the summer and not as standalone legislation.

Alternative Pay Plan (by August 31, 2026)

This is the most important date for civilian feds trying to determine their annual pay raise. This document typically reflects what the President will sign by the end of the year – unless there’s a pay freeze and then no executive order is needed.

Executive Order (December 2026)

Formally implements the raise for January 2027, often falling in the 1–2% range unless driven by inflationary or political pressures.

What Advisors Should Tell Their Federal Clients Right Now

“No news” does not mean “no federal pay raise.” The omission of a salary increase from the budget is notable, but not determinative and definitely not a surprise.
The real signal comes in late August. The Alternative Pay Plan is the document that matters. If it isn’t issued, an automatic civilian raise of over 30% would be triggered so the pay plan is practically a guarantee.
Congress could still act—but usually doesn’t. Advisors should monitor summer budget discussions but avoid over‑promising.
Prepare clients for a modest raise. Based on recent history, a 1–2% adjustment remains the most likely outcome unless economic or political conditions shift. Offer financial strategies or products that can help them with their retirement goals regardless of future annual raises.

The FY 2027 budget proposal, along with the FAIR Act, are early indicators of upcoming pay increases for federal employees but hardly determinative. Advisors should track congressional discussions over the summer, but the decisive moment will come by August 31, when the White House releases its Alternative Pay Plan.

Are you falling for these 3 federal retirement myths?

Advantages of Offering Voluntary Benefits to Federal Employees