The Federal Reserve is an important U.S. institution whose primary function is the promotion of financial and economic stability. The operations of the Fed system are led by the Board of Governors, which has seven members (including the Fed chair), and they are appointed by the U.S. president and confirmed by the Senate.
The seven governors, the president of the Federal Reserve Bank of New York, and four of the remaining 11 Reserve Bank presidents, who serve one-year terms on a rotating basis, make up the 12-member Federal Open Market Committee (FOMC), which sets monetary policy in the world’s biggest economy
Congress sets the salaries of the board members.
What Are the Salaries of Federal Reserve Board Members?
The Fed chairman is the top official of the U.S. central bank and is head of the Board of Governors. The latest published annual salary of the chair is $203,500, but that figure is from 2019.
Congress also sets the salaries of the other board members. While the pay is higher than the national average of around $64,000 for 35–64 year olds, salaries for Fed board members tend to be below that of executives at major financial institutions. Board members (including the Vice Chair and Vice Chair for Supervision) made $183,100 as of 2019.
Some employees at the Fed, though, can earn more than the chair, depending on seniority and experience, and the salary structure ranges from $34,000 to $275,900. Salaries of the presidents at the 12 Reserve Banks are likely to be less than the Fed chair, and their salaries are paid by the district bank they represent rather than by the government.
How Long Do Board Members Serve?
The seven board members can serve a 14-year term, but they may not be reappointed. The lengthy term is meant to provide stability and to prevent political pressures on their work. The chair, the vice chair of the board, and the vice chair for supervision serve terms of four years each.
Are Federal Reserve Board Members Employees of the Government?
Board members, who are nominated by the president and confirmed by the Senate, are considered government employees. However, most employees at the Fed aren’t government employees, and their salaries and wages are set by the district bank at which they serve. The Fed itself is self-funded and keeps the profit it makes each year from interest on trading U.S. government securities and foreign currency transactions.
What Benefits Do Federal Reserve Board Members Receive?
Board members are employed as part of the executive branch of government, and their salaries are set by Congress. As such, their benefits fall under the pay scheme of the federal government. For example, retirement plans fall under the Federal Employees’ Retirement System, and board members must meet FERS eligibility requirements for their pension.
Most Fed employees, who are paid by the central bank, are entitled to a wide range of benefits similar to those in the private sector. The central bank provides health care plans, matching contributions for 401(k) plans, pensions, tuition assistance, and flexible work arrangements.
