As a NYSLRS member, you have a defined benefit retirement plan that provides a lifetime pension when you retire. Laws passed by the Legislature and signed by the Governor have established the formulas used to calculate these benefits. Your specific benefit will be based on two main factors: service credit and final average salary. You’re probably familiar with service credit — it’s generally the years of service you’ve spent working for a participating employer. But, what is a final average salary (FAS)?
When we calculate your pension, we find the set of years (one, three or five, depending on your tier and retirement plan) when your earnings were highest. The average of these earnings is your FAS. Usually your FAS is based on the years right before retirement, but they can come anytime in your career. In fact, the years used to calculate your FAS may not match up to a calendar year or even a fiscal year. For FAS purposes, a “year” is any period during which you earned one full-time year of service credit.
Your tier and plan determine how your FAS is calculated:
- Three-year FAS: Members in Tier 1, 2, 3, 4 and 5.
- Five-year FAS: Members in Tier 6.
- One-year FAS: Members in the Police and Fire Retirement System (PFRS). Your employer must choose to offer this benefit. It’s not available to PFRS members covered by Article 14 and generally not available to PFRS Tier 6 members.
Exclusions and Limits
The law limits the FAS of all members who joined on or after June 17, 1971. For example, for most members, if your earnings increase significantly through the years used in your FAS, some of those earnings may not be used toward your pension. The specific limits vary by tier; check out your retirement plan booklet on our Publications page for details.
Since 2010, with the creation of Tiers 5 and 6, the Legislature and the Governor have introduced additional limits to the earnings that can be used toward the FAS:
- Overtime pay is capped — For ERS, $19,571.60 in calendar year 2019 and $20,158.75 in 2020. For PFRS, the cap is 15 percent of earnings.
- Overtime pay is capped for ERS, $16,779 in calendar year 2019. For PFRS, the cap is 15 percent of earnings.
- Lump sum vacation pay and wages from more than two employers are no longer included in your FAS.
- Any earnings above the Governor’s salary are left out of your FAS.
Calculating your FAS at retirement can take time because we must collect salary information from your employer and factor in items such as retroactive payments. This effort is necessary to ensure that your pension calculation is accurate and that you receive all the benefits you are entitled to.
Find out more about how FAS is calculated on our website.