Pending Federal Reserve Employee Pension Plan | A-004

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A
POLICY
To
Establish a Contributory Employee Pension Plan to Attract and Retain Qualified Personnel and Provide Long-Term Financial Benefits to Employees of the Federal Reserve Bank

​

The Federal Reserve Bank, under the powers conferred by the Federal Reserve Act, enacts the following provisions:

1. Short Title and Enactment
(1) This policy may be cited as the "Federal Reserve Employee Pension Plan", or "FREPP".

(2) This policy shall be enacted upon approval by the Federal Reserve Board and signature by the Governor.

(3) The policy has been authored by jJoshuaTheGreat

2. Establishment
(1) The Federal Reserve Employee Pension Plan (FREPP) is hereby established to provide pension savings and investment benefits to employees of the Federal Reserve Bank.

(2) FREPP shall be a contributory pension plan funded through employee contributions, matching contributions from the FRB, and investment returns.

(3) The Plan's assets shall be held and administered by the Federal Reserve Employee Pension Foundation, established pursuant to A-005.

3. Contributions
(1) All salaried employees of the FRB shall participate in FREPP, subject to applicable employment requirements.

(2) Employee Contributions shall be deducted from each paycheque, including applicable bonuses, and matched by the FRB as follows:

Contribution	Standard Rate​	Enhanced Rate​
Employee	5% ​	7% ​
Employer Match	5% ​	7%​
Total	10%​	14%​

(3) Employees may elect the Enhanced Rate by notifying the Employer and may subsequently return to the Standard Rate.

(4) Changes in contribution rates shall take effect on the next practicable payroll.

(5) Employer Contributions shall be additional to employees' gross compensation.

4. Vesting
(1) Employees shall become fully vested in their pension benefits upon completing four consecutive calendar months of employment with the FRB.

(2) Employees leaving before four months shall forfeit all employer contributions and attributable investment returns.

(3) Employee Contributions and their attributable investment returns shall remain the property of the employee regardless of length of service.

(4) Once vested, Employer Contributions and their attributable investment returns shall not be forfeited upon termination of employment.

(5) Employment completed before FREPP's establishment shall count toward vesting.

5. Pension Withdrawals and Payments
(1) Upon completing four months of employment, employees may elect to:

i. withdraw part of all of their vested Pension Balance;​

ii. receive recurring monthly payments; or​

iii. leave their Pension Balance invested.​

(2) Employees may commence, suspend, or modify payments while employed, subject to reasonable processing requirements.

(3) Employees receiving pension payments while employed shall continue making their regular contributions.

(4) Upon leaving the FRB after vesting, employees shall elect either:

i. to receive the entire remaining vested Pension Balance; or​

ii. convert their entire remaining vested Pension Balance into a fixed monthly payment in perpetuity, at a reasonable risk-free rate of return.​

(5) An election under subsection 4 shall be final and irrevocable. Employees electing a perpetuity shall surrender their right to withdraw the converted principal or receive a subsequent lump-sum distribution.

(6) Perpetuity payments shall continue indefinitely, with rights of succession to a designated beneficiary as prescribed by the Foundation.

(7) Employees leaving before vesting shall receive their own contributions and attributable investment returns, without employer contributions.

6. Retrospective Contributions
(1) Employees who have completed at least four months of consecutive employment as of this policy's enactment may make voluntary retrospective contributions in recognition of their prior service.

(2) Eligible employees may contribute up to 5%, or 7% at the Enhanced Rate, of their total qualifying compensation earned since their initial date of FRB employment, excluding compensation already subject to FREPP contributions.

(3) The FRB shall match qualifying retrospective contributions dollar-for-dollar, up to the applicable contribution limit.

(4) Employees may contribute any amount up to their eligible maximum.

(5) Retrospective contributions must be received by December 31, 2026.

(6) All matching contributions under this section shall be immediately vested.

(7) Investment returns shall accrue only from the actual investment of contributed funds.

7. Administration
(1) Accounting Operations shall administer contributions, payroll deductions, pension accounts, and benefit payments.

(2) FREPP assets shall be held and invested by the Foundation in accordance with A-005 and applicable law.

(3) The FRB shall provide for its matching contributions in its approved operating budget.

8. Implementation
(1) This policy shall become operational upon the lawful establishment of the Foundation and satisfaction of applicable regulatory and employment requirements.

(2) The FRB Compensation Policy (A-002) is hereby amended to incorporate the contribution and matching obligations established herein.