High-3 and pretax FEHB premiums


Q. I was just told by my human resources specialist that when pretax Federal Employees Health Benefits premiums reduce my taxable income, they also reduce my salary for the computation of high-3 average salary for retirement. Is this true? It doesn’t sound right to me, and I’ve never heard such a thing.

A. You haven’t heard such a thing because it isn’t true. Your high-3 is based on your highest average pay rates during any three consecutive years before any deductions are taken from that pay.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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