Q: I plan to retire December 31, 2015, and on December 1, 2015 I am due for a step increase. Will the retirement estimate project from that increase? Will I be paid for my leave and annuity at the new pay increase?
A: Due to the fact that you are getting a pay increase one month before you retire, your high three will be slightly higher for the purpose of computing your retirement. OPM says the following about your high three: “The “high-3 average pay” is the largest annual rate resulting from averaging an employee’s rates of basic pay in effect over any period of 3 consecutive years of creditable civilian service, with each rate weighted by the length of time it was in effect.” One month is, in effect, 1/36 of the period used to calculate your high three.
You will be paid for you annual leave at the new pay rate.
John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. Order your copy at shoplrp.com. Ask your human resources office to contact Federal Career Experts about pre-retirement training.