Many factors go into the calculation of your NYSLRS pension, but there are three core components that help us determine what your pension will be. They are:
- Your NYSLRS retirement plan
- Your Final Average Salary (FAS)
- Your service credit
We use this information to calculate your retirement benefit – but how does each part fit into that calculation?
Your NYSLRS Retirement Plan
When you first joined NYSLRS, in either the Employees’ Retirement System (ERS) or the Police and Fire Retirement System (PFRS), you were assigned to a tier. In most cases, if you know your System and tier, you can identify your NYSLRS retirement plan.
Your NYSLRS retirement plan determines the formula we would use to calculate your NYSLRS pension. It also defines, based on your tier and Retirement System, a minimum amount of time you need to work and earn service credit in order to be eligible for retirement. Some retirement plans have more requirements than others, so you should refer to your plan publication for more information.
Final Average Salary (FAS)
At NYSLRS, a Final Average Salary (FAS) is the average of the wages a member earned during a set period of time when his or her earnings were the highest. If you are an ERS or PFRS member in Tiers 1 through 5, we would calculate your FAS using a three-year period; for members in ERS and PFRS Tier 6, we’d use a five-year period. Some PFRS members, if their employer offers it, may be eligible for a one-year period. We will use your FAS, in combination with your age at retirement and your total amount of service credit, to calculate your NYSLRS pension.
There are some restrictions as to what can and can’t be included in a member’s FAS. For instance, for ERS Tier 3, 4 and 5 members, 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.
For ERS and PFRS Tier 1 members, if your date of membership is 6/17/71 or later, the wages* in any 12-month period cannot exceed the earnings in the previous 12-month period by more than 20 percent. Any amount in excess of this will be excluded.
Other FAS limitations you should be aware of include the following:
- For Tier 2 ERS and PFRS and Tier 3 PFRS members covered by Article 11, the FAS is based on the highest average of wages earned during any three consecutive years. Earnings in any year included in the period cannot exceed the average of the previous two years by more than 20 percent. Any amount in excess of this will be excluded.
- For Tier 3 PFRS members covered by Article 14, the FAS is based on the highest average of wages* earned during any three consecutive years. Earnings in any year included in the period cannot exceed the average of the previous two years by more than 10 percent. Any amount over the 10 percent limit will be excluded.
- For Tier 5 PFRS members covered by Article 22, the FAS is based on the highest average of wages earned during any three consecutive years. Earnings in any year included in the period cannot exceed the average of the previous two years by more than 20 percent.
- For Tier 6 ERS and PFRS members, the FAS is based on the highest average of wages* earned during any five consecutive years. Earnings in any year included in the period cannot exceed the average of the previous four years by more than 10 percent.
You can find out what earnings go into your FAS by checking the Final Average Salary page on our website or your plan publication. Our publication, Your Retirement Benefits, also features examples on how we’ll determine your FAS.
As a NYSLRS member, by working for an employer who participates with NYSLRS, you earn service credit over the course of your career. For most members who work full-time, it takes 260 workdays per year to equal one year of service credit. Members who work a part-time schedule or in educational settings can refer to their plan publication to see how their service credit is calculated.
Your NYSLRS pension will be directly related to your service credit. Your NYSLRS retirement plan may require you to earn a specific amount of service credit in order to receive your full NYSLRS pension. In other cases, if you retire with less service credit and don’t meet the age requirements of your NYSLRS retirement plan, your NYSLRS pension will be reduced.
Planning Ahead for Your NYSLRS Pension
As you get closer to retirement age, keep an eye on your service credit and FAS. Make sure we have an accurate record of your public employment history so you receive the service credit you’re entitled to. You can check the total amount of service credit you’ve earned in your latest Member Annual Statement. Also, take some time to look into the FAS information for your NYSLRS retirement plan to be aware of any FAS limits.
If you have questions, or want to find out more detailed information about what makes up your NYSLRS pension, please contact us.
*Wages include regular salary, overtime, and recurring longevity payments earned within the period used to determine final average salary.