The importance of your high-3


Whoopee! You just got a 1 percent pay raise, the first increase in several years. It may not sound like much, but in the long run it will pay off. That’s because once you meet the age and service requirement to retire, it’s your length of service and high-3 that will determine what your annuity will be.

Your high-3 is an average of your highest rates of basic pay over any three consecutive years of creditable civilian service, with each pay rate weighted by the length of time it was received. That three-year period starts and ends on the dates that produce the highest average pay. Therefore, the counting doesn’t have to start on Jan. 1 or any particular date.

For most of you, your highest three years of basic pay will be the ones that immediately precede the day on which you retire. All you need to be do to find the starting date for your high-3 calculation is to subtract three years from the date you plan to retire plus a day.

If you are a CSRS, CSRS Offset or FERS employee with a CSRS component in your annuity, periods of service that are creditable in determining your length of service but not in your annuity computation can still be used in determining your high-3. That includes, for example, periods of non-deduction service on or after Oct. 1, 1982, for which you didn’t make a deposit or CSRS service that ended on or after Oct. 1, 1990, for which you took a refund of your retirement contributions and failed to make a redeposit.

The rules are different if you are covered by FERS. If a period of service isn’t creditable for determining your length of service, it can’t be used in computing your high-3. On the other hand, service that is creditable includes time under FERS when retirement deductions were taken and not refunded; non-deduction service (such as temporary or intermittent) performed before Jan. 1, 1989, but only if a deposit is made for that time; service under CSRS Offset, if the CSRS deductions weren’t refunded after you transferred to FERS; and periods of military service for which a deposit has been made.

Your high-3 won’t be affected if you had to take leave without pay, unless it exceeded six months in a calendar year. Any LWOP beyond that will cause your three-year period to be extended. So, for example, if you had taken nine months of LWOP in a calendar year, your high-3 period would be three years and three months long, to account for those three months of excess LWOP. The six-month limitation on LWOP doesn’t apply if you were called to active military duty.

The FERS formula for calculating your annuity is simple: It’s 1 percent of your high-3 average salary for each year of service, or 1.1 percent if you retire at age 62 or later with at least 20 years of service.

The CSRS formula is more involved: It’s 1.5 percent of your high-3 for your first five years of service, plus 1.75 percent of your high-3 for your second five years, plus 2 percent of your high-3 for all remaining years. If you are a FERS employee who will have a CSRS component in your annuity, you figure each period of service separately and add the results. The formulas are different for special category employees, such as law enforcement officers, firefighters and air traffic controllers.)


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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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