Retention pay


Q: I receive retention pay of 10 percent of my base salary. I have run across articles that indicate that retention pay can be used to calculate the high-3. Is that true?

A: As a rule, recruiting and relocation bonuses and retention allowances are not considered part of the basic pay of an employee for any purpose, including calculation of retirement annuity. Since a high-3 is based solely on basic pay, the amount from which retirement deductions are taken, you can get a pretty good idea about how your pay is being treated by looking at your latest pay slip. For a more accurate answer, you can visit 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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