Final Average Salary (FAS)
Your pension is based on your years of credited service and your final average salary (FAS). FAS is the average of the wages you earned during any 36 consecutive months of service when your earnings were highest. This is usually the last three years of employment.
If the earnings in any year included in the FAS period exceed the average of the previous two years of earnings by more than 10 percent, the amount in excess of 10 percent is excluded from the computation.
The calculation of your FAS can include, but is not limited to, the following types of payments. In some cases, certain restrictions may apply.
- Regular salary;
- Overtime up to the annual limit, if earned in the FAS period; *
- Holiday pay;
- Noncompensatory overtime earned in the FAS period; *
- Longevity payments (maximum of three), if earned in the years used in the FAS calculation; and
- Payment for up to 30 days vacation, if the FAS is based on the 36 months immediately preceding retirement.
*Annual overtime pay in excess of $15,914 (calendar year 2012) cannot be used in the FAS calculation. This overtime pay limitation increases 3 percent annually.
The following types of payments are not considered regular compensation and, in most cases, will not be included in your FAS calculation:
- Unused sick leave;
- Payments made as a result of working your vacation;
- Any form of termination pay;
- Payments made in anticipation of retirement;
- Lump sum payments for deferred compensation; and
- Any payments made for time not worked.