High-3, basic pay


Q. In your article of 9/21/10, you stated: “Your annuity will be based on you highest three consecutive years of average basic pay.  Basic pay is the amount of your salary from which retirement deductions are taken.” OPM states, “Unlike COLA payments, locality pay is included in calculating your “high 3″ average salary.” Can you please clarify?

A. Locality pay is considered to be a part of basic pay for annuity calculations purposes.


About Author

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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