While the exact formula used to calculate a NYSLRS pension varies by tier and plan, your pension will be based on your service credit and final average earnings (FAE). Your FAE is the average annual earnings you received during the period when your earnings were highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6). Your FAE can include overtime pay you earned in that period, but, for Tier 5 and 6 members, the law limits how much overtime can be used when calculating your pension.
You can still earn overtime pay beyond the limit — it just won’t be factored into your FAE. On the other hand, members aren’t required to make contributions on overtime pay that is above the limit.
Tier 5 Overtime Limits
The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. In 2023, the limit for Tier 5 ERS members is $22,028.01.
For Tier 5 Police and Fire Retirement System (PFRS) members, the overtime limit is 15 percent of your regular earnings each calendar year.
Tier 6 Overtime Limits
The overtime limit for Tier 6 ERS members increases each calendar year based on the annual increase of the Consumer Price Index (CPI). In 2023, the limit for Tier 6 ERS members is $19,729.
For Tier 6 PFRS members, the overtime limit is 15 percent of your regular earnings each calendar year.
There may be other limitations to your FAE. For example, for most members, if your earnings increase significantly during the years used in your FAE, it’s possible that some of those earnings may not be used toward your pension. The specific limits vary by tier. Visit our Final Average Earnings page for more information.
You can learn more about the overtime limits, FAE and retirement calculations in your retirement plan booklet. Find yours using our Find Your NYSLRS Retirement Plan Publication tool.