The era of “everyone gets a 5” is officially dead. As reported by FEDweek, OPM Director Scott Kupor has confirmed that the strict rating caps currently applied to the Senior Executive Service (SES) will expand to cover the entire federal workforce for the current fiscal year 2026 rating cycle.
This is not a proposal for the distant future; it is a directive for the performance year you are working in right now. The move effectively mandates that agencies grade on a curve, ending the practice of “ratings inflation” and fundamentally changing how your performance is rewarded and protected.
📉 The “New Math” of Your Performance Rating
For decades, the majority of federal employees have received ratings of “Outstanding” (Level 5) or “Exceeds Fully Successful” (Level 4). Under the new “forced distribution” model, that majority will be mathematically eliminated.
The 30% Cap: Kupor has cited the new SES policy as the model for the rest of the government. That policy limits the number of employees who can receive a Level 4 or Level 5 to just 30% of the workforce.
- The Result: This means 70% of employees must be rated as “Fully Successful” (Level 3) or lower, regardless of how hard they work.
- The “No Shame” Spin: Director Kupor has stated there is “no shame” in a Level 3 rating, defining it as meeting all expectations. However, for employees accustomed to 5s, this is a de facto demotion that carries real financial consequences.
📊 Sound Data: The “Great Downgrade” is Coming
To understand the scale of this shift, you have to look at the data OPM is using to justify it.
- The “Inflation” Gap: Historical OPM data shows that approximately 60% to 70% of federal employees typically receive a rating of Level 4 or 5.
- The Drop: If the new 30% cap is enforced, half of the high performers in government will instantly drop to Level 3.
- The “Failure” Target: Kupor noted that currently, only 0.3% of the workforce receives a rating below Level 3. He argues this is statistically impossible in a two-million-person workforce and suggests that a “normal” underperformance rate should be 5% to 10%. While OPM claims there is no forced quota for failures yet, the pressure to identify that bottom 10% will be immense.
⚠️ The Risks: Bonuses and Job Security
The danger of this policy isn’t just a bruised ego; it’s a direct hit to your wallet and your job security.
1. The Bonus Blackout The new guidance directs agencies to funnel 60% or more of their awards budget exclusively to the top 30% of performers (Level 4s and 5s).
- The Reality: If you fall into the “Fully Successful” bucket (the 70%), your performance bonus will likely vanish or become negligible.
2. The RIF Vulnerability This is the most critical risk. In a Reduction in Force (RIF), your retention standing is calculated using your Tenure, Veterans’ Preference, and Performance Ratings.
- The Math: An “Outstanding” rating typically adds 20 years of service credit to your retention score. A “Fully Successful” rating adds significantly less (often 12 years or fewer).
- The Threat: By forcing high performers down to a Level 3, OPM is effectively stripping them of years of retention seniority. If your agency downsizes in 2026, you will have less protection than you did in 2025.
🛡️ Don’t Rely on a “5” to Save You
The rules of the game have changed mid-stream. You can no longer rely on a guaranteed “Outstanding” rating to secure your bonus or your job.
Internal Benefit Advisors helps you build a defense strategy that works in a “Fully Successful” world.
How We Help You Adapt:
- RIF Retention Audit: We calculate your true retention standing based on a projected “Level 3” rating. If this drops you into a danger zone, we help you evaluate Voluntary Early Retirement Authority (VERA) options before a RIF occurs.
- Financial Resilience: With performance bonuses likely drying up for the majority, we help you adjust your TSP contributions and cash flow plan to ensure your retirement goals stay on track without that extra annual income.
- Exit Strategy Planning: If the new “forced distribution” culture signals it’s time to leave, we analyze your Deferred Retirement vs. Immediate Retirement numbers to find your best exit date.
The bell curve is coming. Make sure you are ahead of the curve, not under it.
Contact Internal Benefit Advisors today for a performance-impacted benefits review.
References
- FEDweek. “Forced Distributions for All Coming for Current Ratings Cycle, Kupor Says.” January 27, 2026.
- OPM Director’s Blog. (Not) Managing Performance. January 2026.
- Government Executive. Trump to limit top ratings for all feds and consolidate scoring in forthcoming rule. December 17, 2025.
- Internal Benefit Advisors. Retrieved from https://internalbenefitadvisors.com
