Your High-3: The One Number That Decides the Size of Your Federal Pension
Emily A. Hall ·
Most federal employees assume their pension is based on what they were earning when they walked out. It is not. It is based on the high-3.
What the high-3 actually is
Your high-3 is the highest average basic pay you earned during any three consecutive years of creditable service. Usually that is your final three years, because pay tends to rise across a career. But it does not have to be. If you earned more in an earlier stretch — a higher-graded detail, a different locality, a position you later stepped down from — that period can be your high-3 instead.
What counts and what doesn't
Counts: base salary and locality pay.
Does not count: overtime, bonuses, awards, and most premium pay categories.
This surprises people who worked substantial overtime and assumed those years would lift the figure. They do not. The high-3 is built on basic pay, and basic pay is a defined term.
Why timing matters more than people expect
Because the calculation uses an average over three consecutive years, when things happen inside that window changes the result.
- A promotion late in your career only lifts the average for the portion of the window it covers. Six months at a higher rate moves the number far less than two years at that rate.
- A within-grade step increase has the same effect on a smaller scale.
- Your separation date determines where the window closes. Leaving a few months later can capture more time at your highest rate.
None of this means you should stay longer than your health or your life allows. It means the number is knowable in advance, and decisions made without knowing it are made blind.
Where it fits in the formula
The FERS annuity computation is roughly your high-3, multiplied by your years of creditable service, multiplied by 1% — or 1.1% if you retire at 62 or later with at least 20 years of service.
Every one of those three terms is worth understanding. The high-3 is the one people most often get wrong, because they substitute their current salary and get a number that is too high.
What to do
Ask your HR office or servicing benefits specialist for your high-3 figure, or work it out from your pay history. Then run the formula with your actual service years.
Do it before you make any decision that depends on the answer, not after.
General education, not financial advice. Confirm your figures with your servicing HR office and OPM.