NAF (non-appropriated funds) employees are federal employees but not subject to OPM’s employment rules like other jobs available at US federal agencies.
What Are Non-Appropriated Fund Careers in the US Government?
A non-appropriated fund (NAF) career is a civilian job within the Department of Defense (DoD) – typically on military bases. Unlike most positions in the US federal government, NAF employment is characterized by the fact that their salary is not funded via Congress’ approval, or “appropriation.” Because of this, OPM (Office of Personnel Management) rules do not apply to NAF jobs, excluding these positions from receiving some benefits that most federal workers have access to. This article highlights the differences between typical federal employment and a nonappropriated fund job, the benefits available to these employees, and the various roles and responsibilities associated with these positions. These occupations are varied and numerous, including teachers, cooks, therapists, cashiers, and much more.
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Employee Benefits for NAF Workers
Annual Leave and Sick Leave is available to people working in these positions, but the rules are listed out in the DoD Civilian Personnel Management System, differing from the ones by OPM.
Health and Life Insurance
Health Insurance is also available but through not the Federal Employee Health Benefits (FEHB) program. Workers are responsible for 30% of the premiums while the DoD covers the remaining 70%. (For 2024, the plans were provided through Aetna.)
Life Insurance is offered by the NAF Group Life Insurance program, which is similar to but completely separate from FEGLI (the Federal Employee Group Life Insurance program).
Members of the NAF workforce are allowed to take out a Long-Term Care Insurance policy from the Federal Long-Term Care Insurance Program (FLTCIP), however applications for new policies are currently suspended and have been since December 2022.
Retirement Plans for NAF Employees
NAF employees cannot contribute the Federal Employee Retirement System (FERS), but like other employee benefits for those whose salaries are not appropriated by Congress, there is a similar but different defined-benefit plan. Contributions are made to the Army NAF Retirement Trust and not FERS. After serving in a NAF position and contributing for 5 years, an individual is entitled to a guaranteed pension for their lifetime once they retire.
As for the Thrift Savings Plan (TSP), workers paid via non-appropriated funds cannot contribute to the TSP like most civilian and military personnel of the US federal government. However, there is a 401(k) plan managed by Fidelity that they are able to participate in. The contribution limits for this plan are in line with the TSP and private-sector 401(k) plans’ limits. The following table shows how the DoD will match contributions:
| If employee contributes… | The match contribution will be… |
| 1% of pay | 1% |
| 2% | 2% |
| 3% | 2.5% |
| 4% | 3% |
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Various Roles and Occupations
Common Roles and Positions
NAF employment encompasses a variety of roles and positions that are needed on a given military base, whether it’s Army, Navy, or the Air-Force. Common positions include, but are not limited to, roles in behavioral health, education, fitness, food, hospitality, recreation, human resources, and retail.
Understanding the Oversight of Non-Appropriated Employment
Oversight of NAF operations is essential to ensure that funds are managed responsibly and that programs meet the needs of the military community. NAF employees are often involved in monitoring financial performance, evaluating program effectiveness, and implementing improvements as necessary. This oversight is crucial for maintaining the integrity of NAF operations and ensuring that the services provided align with the goals of the Department of Defense. Employees in these roles must possess strong analytical skills and a thorough understanding of financial management principles.
Examples of Positions in Fitness Centers
Within just the realm of recreation and fitness, NAF employment offers a diverse array of positions. Examples include fitness center managers, activity coordinators, and sports program directors. These roles involve planning and executing recreational programs, managing facilities, and promoting healthy lifestyles among service members and their families. Employees in these positions play a vital role in enhancing the quality of life for the military community, contributing to overall morale and well-being. (MWR = morale, welfare, and recreation)
What are NAF Careers and How Do They Differ from Federal Employment?
Funding for NAF Occupations at the Department of Defense
These positions within the DoD are funded through revenues generated by activities that do not rely on congressional appropriations. This means that the salaries of NAF employees come from the income produced by services such as recreation, dining, and retail operations on military installations. NAF employees are considered federal employees, but their employment is distinct from traditional roles in the federal government. The funding for NAF positions is derived from the profits of these activities, allowing for a different operational framework compared to appropriated positions.
Key Differences Between NAF and Other Federal Jobs
One of the primary differences between NAF and other federal positions lies in the funding mechanism. While most federal jobs are funded through appropriated money allocated by Congress, NAF positions operate on a self-sustaining model. This distinction affects various aspects of employment, including job security, benefits, and pay structures. For instance, NAF employees may not have the same level of job security as federal civil service positions, but they often enjoy more flexible work schedules and opportunities for overtime pay. Additionally, NAF positions may offer unique benefits tailored to the recreational and welfare needs of military personnel and their families.
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we are federal employee financial advisors with a focus on retirement planning. Learn more about our process designed for the career fed.
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