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Does the 3.8% ATC Pay Raise Increase Your High-3 Under FERS and Should It Change When You Retire?
Federal pay policy is shifting in subtle but important ways, and the ATC pay raise 3.8% is a clear signal of that change. This increase is not simply a routine adjustment meant to keep pace with inflation. Instead, it reflects a more targeted compensation strategyone that prioritizes mission-critical roles, workforce stability, and operational risk within the federal system.
For air traffic controllers, that policy shift quickly becomes personal. Pay decisions made late in a career don’t just affect today’s paycheckthey can permanently shape retirement income.
That leads to a central question many controllers are asking:
Does the 3.8% ATC pay raise increase your High-3 under FERS, and should it change when you retire?
The answer is yes to the first part. The second part is more nuanced and depends on timing, math, and strategy, not emotion or headlines.
What the 3.8% Raise Means and What It Doesn’t
To understand the retirement impact, it’s essential to understand what kind of pay increase this actually is.
The 3.8% ATC raise is an increase to basic pay. Under the Federal Employees Retirement System, only basic pay is used when calculating your pension. That makes this raise fundamentally different from many other forms of compensation controllers receive during their careers
This distinction matters because many controllers experience years where take-home pay is dramatically higher due to overtime. While that income is real and valuable, it does nothing to improve the High-3 average salary federal employees depend on for retirement calculations.
Why the 3.8% ATC Pay Raise Matters for Retirement
Not every raise deserves retirement-level attention. This one does because of who it applies to and when it arrives.
Many air traffic controllers are already:
- Within a few years of retirement eligibility
- Inside the period that determines their High-3
- Operating under special retirement provisions that magnify the impact of pay changes
For controllers earlier in their careers, a raise mainly improves current income. For controllers closer to retirement, a raise can lock in higher income for life. That’s why the ATC salary increase FERS conversation isn’t about excitement it's about permanence.
This raise is part of a broader shift away from uniform federal pay increases and toward targeted compensation strategies, a trend you can learn more in more detail - What the 3.8% Air Traffic Controller Raise Signals for Federal Pay in 2026.
How the 3.8% ATC Pay Raise Increases Your High-3
Your High-3 is not based on your final paycheck. It is the average of your highest-paid consecutive 36 months of basic pay.
That structure creates two important realities:
- The raise only helps if it falls inside your top 36 months
- The longer you work at the higher rate, the more influence it has
Each month you earn the higher basic pay nudges the average upward. There’s no special election, no paperwork, and no discretion involved. If the pay is higher and it’s basic pay, it flows directly into your ATC High-3 calculation.
How ATC Special Retirement Provisions Amplify the Raise
Air traffic controllers are not treated like standard federal employees for retirement purposes.
Under ATC special retirement provisions:
- The first 20 years of service are calculated at 1.7% per year
- Any service beyond 20 years is calculated at 1.0% per year
This higher multiplier means that every dollar added to your High-3 works harder for you. A modest increase in High-3 produces more annuity income for an ATC than it would for a standard FERS employee.
This is a critical point that many generic retirement articles miss. When discussing a federal retirement pay raise, ATCs must be evaluated separately.
Why High-3 Matters More Than a One-Year Raise
The retirement system does not reward spikes in income. It rewards sustained earnings.
That’s why understanding how pay is earned matters more than how much is earned in a single year.
This is why focusing only on annual income can be misleading. The structure of the pay matters more than the headline number.
Understanding that the 3.8% ATC pay raise increases your High-3 is only the first step.The harder question is whether that increase is large enough—and timed well enough to justify changing your retirement plans, based on your service history, locality pay, retirement date, and the income you would give up by delaying retirement. That is when a federal financial advisor can help you the most
What the 3.8% Raise Can Mean for Your Pension Income
To make this tangible, consider the following illustrative example. Actual outcomes will vary based on locality, pay band, and service history, but the mechanics remain the same.
Impact of a 3.8% Raise on ATC Pension (Assumes 25 Years of Service)
That increase is not temporary. It becomes part of your pension for life and compounds over every year you collect it.
Should the 3.8% ATC Pay Raise Influence When You Retire?
This is where most of the complexity and risk lies.
Because the High-3 is a 36-month average, the raise does not fully show up immediately:
- Retiring after 12 months captures only part of the increase
- Retiring after 24 months captures more, but not all
- Retiring after 36 months captures the full effect
At the same time, delaying retirement means:
- Forgoing pension checks you could already be receiving
- Delaying the FERS supplement
- Remaining in a demanding, high-stress role longer than planned
Because the High-3 is a rolling 36-month average and ATC retirement rules are highly specific, using a pension calculator is often the only reliable way to determine whether delaying retirement actually improves your lifetime income
In many cases, it takes years of collecting the higher pension to make up for the income you give up by staying. That break-even point is highly individual, which is why using an air traffic controller pension calculator is critical before making any decision.
Common Misconceptions About Pay Raises and Retirement Timing
- “Any raise means I should stay longer.”
Not true. Some raises increase High-3 only marginally. - “Overtime boosts my pension.”
It doesn’t. Only basic pay counts. - “I should wait just to capture the full raise.”
Only if the numbers justify it. Often, they don’t.
These assumptions can lead controllers to trade years of freedom and income for a pension increase that never truly pays off.
Final Thoughts : Strategy Matters More Than Reaction
The 3.8% ATC pay raise does increase your High-3, and a higher High-3 can permanently raise your lifetime pension. But a pay raise alone should never decide when you retire. The real impact depends on your years of service, timing, pay history, health, and long-term goals. In some cases, the raise meaningfully improves retirement income; in others, staying longer adds stress with little financial return.
That’s why working with a federal pension advisor matters—so decisions are based on strategy, not headlines. Schedule a strategy call to see exactly how this raise affects your High-3, pension, and ideal retirement timeline.
FAQs
Q1: Does the 3.8% ATC pay raise count toward my FERS High-3?
A: Yes. The 3.8% raise increases your basic pay, which directly contributes to your High-3 average, boosting your lifetime pension.
Q2: How does the timing of the ATC pay raise affect my High-3?
A: High-3 is calculated based on the highest 36 consecutive months of basic pay. If the raise falls within this period, it increases your retirement annuity; if not, it still raises your baseline pay for future years.
Q3: Do overtime, bonuses, or pay differentials count toward High-3?
A: No. Only base salary and locality pay count. Overtime, one-time bonuses, CIC pay, and premium differentials are excluded from FERS High-3 calculations.
Q4: Should the 3.8% ATC pay raise dictate when I retire?
A: Not alone. Retirement decisions should consider your total service, pay history, health, and personal goals. The raise is valuable, but strategy matters more than reacting to headlines.
Q5: How can I know exactly how this raise affects my pension?
A: A federal retirement advisor can calculate the impact on your High-3, annual pension, and retirement timeline, ensuring your decisions maximize long-term benefits.
Q6: What is the difference between a temporary pay increase and a permanent raise like the 3.8% ATC increase?
A: Temporary pay (overtime, bonuses, or differentials) does not affect High-3 or retirement. The 3.8% ATC raise is permanent and directly increases your High-3 and lifetime pension.
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Jeremy Haug
Jeremy is a seasoned contributor for Federal Pension Advisors bringing years of experience in helping federal employees understand their pension and benefits. His goal is to make retirement planning clear, practical, and empowering.
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