The Office of Personnel Management (OPM) is making it easier for federal agencies to hand out some of their largest cash and performance awards. In a memo dated September 21, 2026, OPM Director Scott Kupor delegated to agency heads the authority to approve individual cash and performance awards above $10,000 and up to $25,000, a step that previously generally required OPM’s own sign-off.
What the Memo Actually Changes
Under existing law, a federal cash award generally can’t exceed $10,000 unless the agency head certifies that the accomplishment is “highly exceptional and unusually outstanding” and OPM approves the larger amount. That OPM review added another step to the process: an agency could identify a standout employee, but an award above $10,000 generally still had to be sent to OPM for review before it could be approved.
The new delegation effectively moves that OPM approval function inside the agency. Agency heads can now review and approve these $10,001-to-$25,000 awards themselves, acting under authority delegated by OPM. They may also pass that authority down to a Chief of Staff, Chief Human Capital Officer, or a bureau or component head. It cannot be delegated any further than that.
Awards above $25,000 still require Presidential approval, and the change doesn’t apply to Presidential awards, Presidential Rank Awards, or performance awards for career members of the Senior Executive Service (SES). Those keep their existing, separate approval paths.
Why OPM Is Doing This Now
The memo ties the change to broader performance management reforms already underway, framing it as a way to help agencies “distinguish high levels of performance” and reward top employees more quickly. In plain terms: OPM wants agencies to have fewer procedural hurdles standing between a high-performing employee and a large award.
The Department of Defense and Internal Revenue Service already had separate authority to approve awards up to $25,000 without OPM approval. The new memo gives other agencies similar flexibility through OPM’s delegated authority.
What It Means for Employees
For most federal employees, this is a change in process rather than a new benefit. The award ceilings in law haven’t moved: $10,000 under an agency’s ordinary award authority, up to $25,000 when the additional statutory requirements are met, and Presidential approval for awards above $25,000. What changes is where the approval happens. An agency that wants to reward an employee for a highly exceptional contribution no longer generally has to send the award to OPM for a separate review. OPM says the change is intended to allow agencies to reward high-performing employees more quickly.
Whether agencies use this newfound flexibility generously or sparingly will likely vary. The change does not guarantee that more employees will receive large awards, but it removes one outside approval step for agencies that want to make them. Employees who believe their work merits recognition at this level may want to raise the topic with their supervisor or human resources office.
Frequently Asked Questions
Does this raise the maximum size of a federal employee award?
No. The $25,000 ceiling for this type of award existed before this memo. What changed is who approves an award in the $10,001-to-$25,000 range, not how large that award can be.
Do cash awards and performance awards count toward the High-3 average salary used for a FERS or CSRS pension?
No. A pension’s High-3 average salary is based on basic pay, generally base salary and locality pay, along with certain other retirement-covered premium pay. Cash awards and performance awards, including the larger awards covered by this delegation, are specifically excluded from basic pay and have no effect on a High-3 calculation or pension amount.
Does every agency now have this authority automatically?
Yes, for awards in the $10,001-to-$25,000 range. The memo delegates the approval function to agency heads governmentwide, effective immediately. Agencies can also pass that authority down internally to a Chief of Staff, Chief Human Capital Officer, or a bureau or component head, but no further than that.
Are awards above $25,000 affected by this memo?
No. Awards above $25,000 still require Presidential approval, and this memo doesn’t change that process.
Read the full OPM memo for the exact legal citations and scope of the delegation.