Q: I am an 1811 under FERS and have hit the pay cap when my AUO is included. I was told by somebody that when my retirement annuity is calculated, that the pay cap will not count against me, and that the high-3 salary will be calculated based on my grade/step/AUO without the pay-cap penalty. Is that true?
A: Your annuity will be based on your basic pay, not what you would have received but for the pay cap. Looked at another way, only pay from which retirement contributions were taken will be used in the computation of your annuity.