Computation

• High-3 Average Salary
• Computation
• Reductions in Annuity
• Cost of Living Adjustments
• Maximum Payable
• Special Computations
• Disability Retirement Computation

Your basic annuity is computed based on your length of service and “high-3” average salary. You also receive credit for unused sick leave if you retire on an immediate annuity. To determine your length of service for computation, add all your periods of creditable service, and the period represented by your unused sick leave, then eliminate any fractional part of a month from the total.

High-3 Average Salary

Your “high-3” average pay is the highest average basic pay you earned during any 3 consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period. Your basic pay is the basic salary you earn for your position. It includes increases to your salary for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc.

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Computation

Here is how the CSRS annuity formula is calculated:

CSRS Annuity Formula
Years of Service	What You Receive
First 5 years of service	1.5 percent of your high-3 average salary for each year
Second 5 years of service	Plus 1.75 percent of your high-3 average salary for each year
For all years of service over 10	Plus 2 percent of your high-3 average salary for each year.

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Reductions in Annuity

Your annuity will be reduced if:

• You retire before age 55 (unless you retire for disability or under the special provisions for law enforcement officers, air traffic controllers, and firefighters); Your annuity will be reduced by one-sixth of 1 percent for each full month you are under age 55.
• You didn’t make a deposit for service performed prior to October 1, 1982, during which no deductions were taken from your pay (non-deduction service after that date is not used in the computation of benefits if the deposit is not paid);
• You didn’t make a redeposit of a refund for a period of service that ended before October 1, 1990;
• You provide for a survivor.
• To provide a full survivor benefit for your current or former spouse, your annuity will be reduced by 2.5 percent of the first $3,600, plus 10 percent of the annuity over $3,600.
• To provide a survivor annuity for a person who has an “insurable interest” in you, your annuity would be reduced from 10 to 40 percent, depending on the difference in your age and the age of the person named.

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Cost of Living Adjustments

Your annuity will be increased periodically by cost-of-living increases that occur after your retire. Your initial cost-of-living increase will be prorated based on how long you have been retired when that cost-of-living increase is granted.

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Maximum Payable

The maximum benefit you can receive from CSRS is 80 percent of your high-3 average salary, plus credit for your sick leave. This limit generally affects only those who have more than 41 years of service when they retire.

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Special Computation for Law Enforcement Officers, Firefighters and Nuclear Materials Couriers

CSRS Annuity Formula If retired under the special provision for firefighters, law enforcement officers, or nuclear material couriers
Years of Service	What You Receive
First 20 years of CSRS law enforcement officer, firefighter and/or nuclear material courier service	2.5% of your high-3 average salary for each year
All remaining CSRS service	Plus 2% of your high-3 average salary for each year

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Disability Retirement Computation

If you retire for disability, you may be guaranteed a minimum annuity equal to the smaller of:

• 40 percent of your “high-3 average salary”, or
• the regular annuity obtained after increasing your service by the time between your retirement and your 60th birthday.

The guaranteed minimum applies if you are under age 60 when you retire and your earned annuity based on your actual service is less than this minimum.

Exception:

The guaranteed minimum does not apply if you are receiving military retired pay and/or compensation from the Veterans Administration in lieu of all or part of the military retired pay. However, if your earned annuity plus your military benefit (or compensation) is less than what it would have been under the guaranteed minimum, the annuity is increased to bring it up to that level.