Expert's View

Besides age and length of service, a key ingredient in computing an annuity is the amount of your basic pay. For retirement purposes, your basic pay is the amount you are paid for your position and level, and includes:

* locality pay, including any portion of non-foreign cost-of-living adjustments that has been converted to locality pay under recent legislation;

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* special salary pay for recruiting and retention purposes;

* within-grade and quality-step increases;

* premium pay, such as standby time, which primarily affects firefighters, and administratively uncontrollable overtime (AUO), which is paid to certain law enforcement officers;

* environmental differential pay for employees exposed to various degrees of hazard, physical hardship, and working conditions of an unusual nature; and

* night differential pay for wage employees;

On the other hand, basic pay doesn’t include a lot of other things, for example:

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* overtime (except as noted above);

* payment for credit hours

* holiday pay;

* military pay;

* bonuses or cash awards;

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* allowances;

* night differential pay for GS employees;

* lump-sum payments for unused annual leave; or

* supplemental payments from the Office of Workers’ Compensation (OWCP).

The best way to determine the amount of your basic pay is to look at your pay voucher and find out how much of it was subject to retirement deductions. Only pay from which retirement deductions are taken is considered to be basic pay. If finding out what parts of your pay had retirement deductions taken out raises any questions, you’ll need to visit your payroll office and get some answers.

Because basic pay is used to determine your high-3, I’ll talk about that next week.

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