The Federal Reserve is an important US institution whose primary function is to promote financial and economic stability. The operations of the Federal Reserve System are led by the Board of Governors, which consists of seven members (including the Chairman of the Federal Reserve Board), who are appointed by the President of the United States and confirmed by the Senate.
The seven governors, the president of the Federal Reserve Bank of New York, and four of the 11 Reserve Bank chairmen, 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 largest economy.
Congress determines the salaries of the members of the board of directors.
What are the salaries of members of the Federal Reserve Board?
The Chairman of the Federal Reserve is the top official of the US Central Bank and the Chairman of the Board of Governors. The last published annual salary for the chair is $203,500, but that number is from 2019.
Congress also sets the salaries of other board members. While the pay is above the national average of about $64,000 for those ages 35 to 64, salaries for Fed board members tend to be lower than those for CEOs at major financial institutions. The members of the Board of Directors (including Vice President and Vice President for Oversight) have earned $183,100 as of 2019.
However, some employees at the Federal Reserve can earn more than the chair, depending on seniority and experience, and the salary structure ranges from $34,000 to $275,900. The salaries of the chairmen at the 12 Reserve Banks are likely to be lower than the chair of the Fed, and they are paid by the county bank they represent rather than by the government.
What is the term of service of the members of the Board of Directors?
The seven board members can serve for 14-year terms, but may not be reappointed. The long term aims to provide stability and prevent political pressure on their work. The president, vice chairman, and vice president serve to oversee four-year terms each.
Are the members of the Federal Reserve Board of Directors employees of the government?
The members of the Board of Directors, who are nominated by the President and confirmed by the Senate, are government employees. However, most employees at the Federal Reserve are not government employees, and their salaries and wages are determined by the area bank in which they serve. The Fed itself is self-financing and keeps the profits it makes each year from interest on trading in US government securities and foreign exchange transactions.
What benefits do members of the Federal Reserve receive?
Board members are appointed as part of the executive branch of government, and their salaries are determined by Congress. As such, their benefits fall under the federal government’s pay system. For example, retirement plans fall under the federal employee retirement system, and board members must meet FERS eligibility requirements for their pension.
Most Federal Reserve 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 Medicare plans, matching contributions to 401(k) plans, pensions, tuition assistance, and flexible work arrangements.