If your employer has adopted this benefit, your FAE includes eligible payments earned in the 12 months right before you retire. Your pension benefit will be calculated based on a one-year FAE unless the three-year calculation provides a higher FAE.
Note: A one-year FAE is generally not available to Tier 6 members.
The one-year FAE can include, but is not limited to, the payments listed below. Payments must be earned in the FAE period.
- Regular earnings;
- Compensatory overtime;
- Holiday pay; and
- Longevity pay.
The following payments are not part of your regular compensation. In most cases, they will not be included in your one-year FAE calculation:
- Unused sick leave;
- Unused vacation;
- Payments made as a result of working your vacation;
- Any form of termination pay;
- Payments made in anticipation of retirement; and
- Any payments made for time not worked.
The earnings used in the calculation of the one-year FAE cannot exceed the wages in the previous 12-month period by more than 20 percent. Any amount over 20 percent will be excluded from the calculation.
*For Tier 5 members, the total amount of overtime and compensatory overtime that can be included in your FAE calculation is limited to 15 percent of your earnings.