2027 federal pay raise: what it means for your High-3 and retirement date

Last updated November 1, 2026

Published November 1, 2026 · By the OnPAR Federal Retirement Education editorial team · Last reviewed Nov 2026

Short answer: For January 2027, the President's alternative pay plan of August 26, 2026 keeps General Schedule base and locality pay at 2026 levels, a 0% adjustment. OPM separately plans a 3.8% increase for law enforcement personnel through special salary rates, with a tentative effective date of January 10, 2027 (OPM). Congress can still change pay through legislation, so watch for final 2027 pay tables from OPM.

What the official sources say

• The President's letter (Aug 26, 2026): "for 2027, base pay and locality pay for civilian Federal employees will not change from the 2026 rates" (H. Doc. 119-189).
• OPM on law enforcement: OPM will use special salary rate authority (5 U.S.C. 5305) for a 3.8% increase. Employees covered by the 2026 law enforcement special rate tables stay covered and get a 3.8% total increase, but special rates are capped at Executive Schedule level IV ($197,200), so some at or near the cap get less or nothing. OPM expects to release the tables by the end of the year (OPM FAQ).
• OPM says special rates are basic pay for retirement purposes.

Why pay raises matter for your pension: the High-3

OPM defines your High-3 as "the highest average basic pay you earned during any 3 consecutive years of service," usually your last three years. Basic pay includes increases with retirement deductions withheld, such as locality pay and shift rates. It does not include overtime or bonuses (OPM: FERS Computation).

Your basic FERS pension is 1% of High-3 × years of service, or 1.1% if you retire at 62 or older with at least 20 years (same OPM page).

What a 0% year does to your High-3

If your pay stays flat for 2027, any 3-year window that includes 2027 averages in one year with no annual raise. For most GS employees this means the High-3 grows more slowly than it would with a raise. Step increases and promotions still count toward basic pay, so a within-grade increase during 2027 still lifts your average.

Illustration only, not a forecast: if your basic pay is $100,000 in 2025, $101,000 in 2026 and $101,000 in 2027, your High-3 over those years is ($100,000 + $101,000 + $101,000) / 3 = $100,667. At 30 years and the 1% formula, that's about $30,200 a year before survivor and other reductions. Plug your own numbers into our FERS pension calculator.

Does this change when I should retire?

Only you and your numbers can answer that. Things to weigh:

• Your High-3 window: retiring later doesn't always raise it in a flat-pay year, but more service always adds to the formula.
• Age 62 with 20 years: reaching it moves you from 1% to 1.1%, which usually matters more than one year's raise.
• Retiree COLA vs. employee pay: for the COLA effective December 1, 2026, OPM announced 2.6% for FERS and 3.6% for CSRS for those receiving benefits at least a year (OPM). See our FERS vs CSRS COLA guide. FERS COLAs generally don't apply to regular retirees until 62.
• Use When can I retire? to check your dates.

Sources

• The President's Alternative Plan for Pay Adjustments, H. Doc. 119-189 (Aug 26, 2026)
• OPM: 2027 Special Rates for Certain Law Enforcement Personnel
• OPM: FERS Computation (High-3)
• OPM: Annuity Payments / COLA

Questions and answers

Is there a federal pay raise in 2027?

For General Schedule employees, the President's August 26, 2026 alternative pay plan keeps 2027 base and locality pay at 2026 rates. Congress can still change pay through legislation.

Do law enforcement officers get a 2027 raise?

OPM says it will use special salary rates to give law enforcement personnel a 3.8% increase, with a tentative effective date of January 10, 2027, subject to a $197,200 cap.

What is the FERS High-3?

OPM defines High-3 as the highest average basic pay you earned during any 3 consecutive years of service. It does not include overtime or bonuses.

Do step increases count toward my High-3 in a pay-freeze year?

Yes. Within-grade step increases and promotions change your basic pay, which is what the High-3 uses.