If you’ve been walking the halls of the Veterans Administration or sorting mail at the United States Postal Service lately, you’ve probably heard the “High-5” whisper. It’s one of those topics that pops up in the breakroom and immediately makes everyone a little nervous about their FERS pension.
The idea is simple: instead of calculating your retirement pay based on your highest three years of earnings, the government would use your highest five. It sounds like a small tweak, but as we’ll see in a moment, those two extra years can carry a heavy price tag.
Today, let’s clear the air. We’ll look at where this proposal stands right now in June 2026, how the math actually works, and most importantly, what you: whether you’re with the Department of Defense, Department of Labor, or Social Security Administration: need to do about it.
The Basics: What’s the Difference?
Right now, your FERS (Federal Employees Retirement System) pension is built on a foundation called the High-3. To find this number, the government looks at your entire career and picks the 36 consecutive months where you earned the highest basic pay. Usually, this is right at the end of your career when you’re at your highest grade and step.
A High-5 change would expand that window to 60 consecutive months.
Why does that matter?
Because most federal employees earn more every year they stay on the job. By reaching back two additional years to calculate your average, the government is pulling in two years of lower pay. It’s like trying to find the average height of a group of people: if you only measure the three tallest people, the average is high. If you add two shorter people to the mix, that average inevitably drops.
The 2026 Update: Is This Actually Happening?
If you’re worried about a sudden drop in your pension next month, take a deep breath. Here is the current landscape as of June 18, 2026:
- The Origins: Back in early 2025, a High-5 provision was officially proposed as part of a larger budget reconciliation bill. The target date for it to start was January 2027.
- The Delays: As negotiations dragged on, the effective date was pushed to January 2028.
- The Current Status: Late last year, the High-5 provision was actually removed from the reconciliation bill entirely.
So, is it dead? Not quite. Think of it as a “zombie proposal.” While it isn’t law right now, it keeps resurfacing in budget talks because it’s an “easy” way for the government to save billions over the long term. For now, your High-3 is safe, but it’s a topic we’re watching closely for every one of our clients.
Let’s Talk Numbers: The $90,000 Example
Math can be dry, so let’s put some real skin in the game. Imagine a dedicated federal employee who has spent years climbing the ladder. They are planning to retire at the end of Year 5.
Their Basic Pay over the last 5 years:
- Year 1: $82,000
- Year 2: $84,000
- Year 3: $87,000
- Year 4: $91,000
- Year 5: $94,000
Under the Current High-3:
We take the average of Years 3, 4, and 5.
- ($87,000 + $91,000 + $94,000) / 3 = $90,666
Under the Proposed High-5:
We take the average of all five years.
- ($82,000 + $84,000 + $87,000 + $91,000 + $94,000) / 5 = $87,600
The Difference: That’s a drop of $3,066 in the “average salary” figure.
When you apply the FERS multiplier (usually 1% or 1.1% per year of service), that translates to hundreds or even thousands of dollars less in your pocket every single year for the rest of your life. Over a 25-year retirement, that “small change” could cost you over $50,000 in lost income.
Who Gets a Free Pass? (The Exemptions)
It’s worth noting that not everyone is in the line of fire. In almost every version of the High-5 proposal, certain groups have been carved out as exceptions. This usually includes those in “Special Category” positions who have mandatory retirement ages, such as:
- Law Enforcement Officers (LEOs)
- Firefighters
- Air Traffic Controllers
Because these professionals are often required to retire earlier, the logic is that they shouldn’t be penalized with a longer averaging period. If you’re an LEO at the DoD or DoJ, your High-3 is generally considered more “protected” than a standard FERS employee.
Why This Hits Home for USPS and VA Employees
If you work for the United States Postal Service, your pay structure is often defined by steady step increases over a long career. The same goes for the Department of Labor and the Veterans Administration.
For these agencies, the High-5 is particularly painful because your pay typically doesn’t “spike” at the end: it climbs steadily. When pay climbs steadily, a 5-year average will always be significantly lower than a 3-year average.
Contrast that with a private-sector job where you might get a massive 20% bonus or a sudden promotion. In the federal world, we rely on that predictable climb, and the High-3 protects the “peak” of that climb better than a High-5 ever could.
“Does This Affect Me If I’m Already Retired?”
We get this question a lot at Federal Benefits Service. The short answer is no.
Legislative changes like this almost never apply retroactively. If you are already retired and receiving your annuity, your High-3 is locked in. These proposals are aimed at future retirees. Even then, there is usually a “grace period” or an effective date set a year or two into the future to allow people to adjust their plans.
Strategic Advice: What Should You Do Now?
Since we don’t know if or when the High-5 will return to the legislative floor, how do you plan for it?
- Don’t Panic-Retire: We’ve seen employees retire earlier than they wanted to just because they were afraid of a law that hadn’t even passed yet. Don’t leave money on the table based on a rumor.
- Maximize Your High-Earning Years: If a High-5 is enacted with a future start date, you might want to look at your “Step” timing. Sometimes staying an extra six months can significantly boost your High-3 (or High-5) average.
- Know Your Numbers: Do you know exactly what your High-3 is today? Most people don’t. Knowing your baseline is the only way to measure how much a change would actually cost you.
- Watch the “Effective Date”: If the High-5 ever passes, the most important piece of information isn’t the law itself: it’s the date it starts. That date becomes the “finish line” for many employees.
Your Next Step: A Benefits Review
Retirement planning for federal employees is like a giant puzzle. The High-3 vs. High-5 debate is just one piece. You also have to worry about your TSP allocations, your FEHB health coverage in retirement, and how your Social Security fits into the mix.
At Federal Benefits Service, we specialize in helping employees from the USPS, VA, DoD, and beyond make sense of it all. We offer no-cost Benefits Reviews where we sit down (virtually or in person) and look at your specific numbers.
We’ll help you calculate your projected annuity, look at your survivor benefit options, and see how a High-5 shift would impact your specific lifestyle.
Don’t leave your future to chance or breakroom rumors.
Click here to schedule your complimentary Benefits Review today. Let’s make sure you’re headed toward the retirement you’ve worked so hard to earn.
Disclaimer: Federal Benefits Service is a private entity and is not affiliated with, endorsed by, or a part of the United States Postal Service or any government agency. This article is for educational purposes only and does not constitute financial, legal, or tax advice.
