The Government’s Quiet New Way to Cut Your Salary Without Firing You

Every federal employee hopes they’ll leave government service on their own terms.

But what if your agency shifts, your position gets downgraded, and your salary starts shrinking before you can do anything about it?

That’s exactly what’s about to happen for thousands of federal employees, thanks to a new policy from the Office of Personnel Management (OPM).

Saved Pay With a Deadline

In reorgs or position downgrades, federal workers rely on a benefit known as “saved pay.” 

It’s a buffer that helps you keep your original (higher) salary temporarily, even if your new job is a lower grade.

But OPM just finalized a change:

Until now, some agencies extended this protection far longer. But that flexibility is ending—quietly, but definitively.

Why This Should Worry You (Even If You're Safe Today)

Saved pay isn’t just a technicality.

It’s often the only thing standing between you and a permanent pay cut after a reorg or classification change.

That means:

• Less time to recover or reposition after a downgrade

• Compressed retirement planning if you’re counting on your “high-3” to stay high

• Fewer options if your role is reclassified right before you're eligible to retire

And if you check any of these boxes, now’s the time to start planning:

• You’re within 5 years of retirement

• Your agency is known for realignment, consolidation, or restructuring

• You’ve ever wondered if your job series or grade level could shift in the next budget cycle

The new OPM rule doesn’t reduce your job security—but it does shrink your income security. 

And that means a reorg in 2026 could feel a lot more like a demotion than a transition.

Because this time, you might not get the soft landing.

— FWR

P.S. When Was the Last Time You Reviewed Your SCD?