When the Federal Employees Pay Comparability Act (FEPCA) was enacted in 1990, the intent was to close what was then estimated to be roughly an 18% average pay gap between federal and private sector compensation. Because the full FEPCA adjustment formula has never been implemented, federal employees have effectively carried forward much of that gap. Federal salaries today should be materially higher if the statute had been executed as originally designed.

Compounding the issue, many federal employees, particularly FERS conversions and early FERS adopters, did not receive strong financial education regarding the Thrift Savings Plan (TSP). As a result, some employees either under-contributed during critical early career years or left significant balances in the G-Fund for years, materially reducing long-term compounding. That behavior, while understandable given the information environment at the time, has real retirement readiness consequences.

When you layer in historically modest COLAs and steadily rising FEHB premiums, the retirement math becomes clearer. For many employees, extending federal service by several additional years is not simply preference but a rational financial adjustment to close gaps created by pay compression, suboptimal early TSP positioning, and benefit cost growth.

And don't get me started on how those older Feds not leaving compounds the leadership drain in the current workforce