Below are the calculations for determining retired base pay, from the DoD Financial Management Regulations. There is a High-3 for reservists:
a. Title 10, U.S.C., sections 1201 or 1202 Retirement With 36 Months or More Service. The retired pay base is an amount equal to the total of the highest 36 months of basic pay, whether or not consecutive, divided by 36.
3-3
DoD Financial Management Regulation Volume 7B, Chapter 3
February 2006
b. Title 10, U.S.C., Sections 1201 or 1202 Retirement With Less Than 36 Months of Active Service. The retired pay base is an amount equal to the total basic pay member was entitled to during active service divided by the number of months (including any fraction) of member’s active service.
c. Title 10 U.S.C., Sections 1204 or 1205 Retirement With 36 Months or More Service. The retired pay base is an amount equal to the highest 36 months of basic pay to which member is entitled (or to which member would have been entitled if member had served on active duty during the entire period of the member’s highest 36 months) divided by 36.
d. Title 10 U.S.C., Sections 1204 or 1205 Retirement With Less Than 36 Months as a Member Before Retirement. The retired pay base is an amount equal to the total basic pay to which member is entitled during the entire period (or to which member would have been entitled if member had served on active duty during the entire period) divided by number of months (including any fraction) that member was a member before retirement.
e. Title 10, U.S.C., Sections 1201 and 1202 Retirement for Reserve Component Members. Effective October 28, 2004, the retired pay base for Reserve members who, while serving on active duty, become entitled to disability retired pay under sections 1201 and 1202 of Title 10, U.S.C., is computed under section 1407(c)(3) of Title 10, U.S.C., as if the member had been entitled to basic pay for the 36 months preceding retirement or the entire period the member was a member of a uniformed service (if less than 36 months), regardless of whether the member served the entire period on active duty. For Reserve Component members with 36 months or more of service, the retired pay base is computed as prescribed in paragraph 030101.C.2.c. above. For Reserve Component members with less than 36 months of active service, the retired pay base is computed as prescribed in paragraph 030101.C.2.d above. Also, see paragraph 520401 for active duty death Survival Benefit Plan annuity computation.