Last week I talked about what’s included in basic pay, and what isn’t. Because your annuity will be based in part on your "high-3," you need to know how it’s computed. The short answer is that your high-3 is an average of your highest rates of basic pay over any three consecutive years of creditable civilian service, with each and every pay rate weighted by the length of time it was received. The three-year period doesn’t start on the first day of a year or month or day on which you receive a pay increase. It begins and ends on the dates that produce the highest average pay.
For most of you, your high-3 will be based on the three years before the day on which you retire. For others it will lie in their past. Either way, when OPM receives your retirement application, it will have access to your entire pay record, from which it can extract the three years of data needed to construct your high-3.
By the way, if you had a break in service, don’t worry. While the three years that make up your high-3 have to be consecutive, they don’t have to be continuous. In other words, two or more periods of service can be joined together to produce a high-3.
Your high-3 also won’t be affected if you were on leave without pay during the three year period when your pay was at its highest, but only if that period of LWOP didn’t exceed six-month in a calendar year. Any period beyond six-months would be treated as if it didn’t exist. As a result, your three years would have to be extended by however long you were on LWOP in excess of six-months. For example, if you were on LWOP for nine months, your high-3 would be based on a period of time that was three years and three months long.
Oh, in case you were wondering, unused sick leave can’t be included when calculating your high-3.
With all the preceding weeks’ information about retirement eligibility, creditable service, basic pay and your high-3 now thoroughly digested, we can move on to the gripping topic of what your annuity will be when you retire. See you next week.
