How is the High-3 retirement formula calculated?

The High-3 retirement formula is calculated using the average of the highest 36 months of pay, which reflects the highest earning period of a government employee's career leading up to retirement. This method ensures that the retirement benefits are based on a representative and inflated signal of compensation, as individuals often earn their top salaries in their later years before retirement. By averaging the highest 36 months, the formula accounts for any potential salary increases or bonuses that might have occurred during that time, making it a more accurate representation of the employee’s earnings. This approach aims to provide a fairer and more realistic basis for determining retirement pay compared to other methods that might not capture the peak earnings as effectively.