Change from NSPS back to GS and a lower base pay


Q. My NSPS base pay was $72,000, plus locality pay (for Hawaii), plus COLA (for Hawaii). My GS “conversion” this month provides a base pay of $68,310 (GS-5), but my locality pay increased, COLA stayed the same, to provide more than the original NSPS $72,000.  This is a $5,000 reduction in base pay. Are base pay plus locality pay used for all benefit calculations?  What items are calculated on base pay only, if any? Pension and TSP are based on base pay plus locality pay.  What about COLA, Social Security, etc?

A. Your annuity will be based on your highest three consecutive years of average basic pay. Basic pay is the amount of your salary from which retirement deductions are taken. Your Social Security benefit will be based on your average indexed monthly earnings (AIME), which are derived from the amount of your pay from which Social Security deductions are taken. The two bases are seldom the same. If you have any questions about what’s being included in each, check with your local payroll office.


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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

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