Final Average Earnings

As a NYSLRS member, you have a defined benefit retirement plan that provides a lifetime pension when you retire. The formula used to calculate these benefits is based on two main factors: service credit and final average earnings. You’re probably familiar with service credit — it’s generally the years you’ve spent working for a participating employer. But what are final average earnings (FAE)?

When we calculate your pension, we find the set of consecutive years (one, three or five, depending on your tier and retirement plan) when your earnings were highest. The average of these earnings is your FAE. Usually your FAE is based on the years right before retirement, but they can come anytime in your career. The years used in determining your FAE do not necessarily correspond to a calendar year. For FAE purposes, a “year” is any period when you earned one full-time year of service credit.

Types of Final Average Earnings

Your tier and plan determine how your final average earnings is calculated:

  • Three-year FAE: Members in Tier 1, 2, 3, 4 and 5.
  • Five-year FAE: Members in Tier 6.
  • One-year FAE: 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.

If you are not sure what retirement plan you are in, you may want to read our recent blog post.

Exclusions and Limits

The law limits the final average earnings 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 FAE, some of those earnings may not be used toward your pension. The specific limits vary by tier; check your retirement plan booklet on our Publications page for details.

final average earnings

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 FAE:

Tier 5

  • Overtime pay is capped — For Employees’ Retirement System (ERS), $20,763.51 in 2021. For PFRS, the cap is 15 percent of earnings.

Tier 6

  • Overtime pay is capped – For ERS, $17,301 in 2021. 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 FAE.
  • Any earnings above the Governor’s salary cannot be included in your FAE.

Calculating Your Final Average Earnings

Your final average earnings is based on money earned during the period used to calculate your pension. This may include payments you receive after you retire, such as retroactive pay from a contract negotiation or pay for unused vacation days.

Calculating your FAE at retirement can take time because we must collect salary information from your employer(s) and factor in items such as retroactive payments and earnings you receive after your date of retirement. This 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 FAE is calculated on our website.

42 thoughts on “Final Average Earnings

  1. Michael Bubniak

    My effective retirement date was May 27, 2021. I retired in Tier 3 with 40 years and 5 months of service with the Department of Taxation and Finance. I am waiting for my Final Average Salary to be calculated. Can you please help me? Thanks!

    Reply
    1. NYSLRS Post author

      When you retire, your pension payment is based on the salary and service information we have on file for you at retirement. In some cases, slight adjustments are made to the initial amount after we receive and process final payroll information from your employer. These recalculations are processed in date order and are generally minimal compared to the overall benefit amount.

      Once we have all the information we need and we finalize your benefit amount, if your payment increases, you will receive a retroactive payment for the amount you are owed back to your date of retirement.

      Reply
  2. Thomas Carroll

    I understand that salaries for pension purposes, I am Tier IV, are capped at 10% above the average of the previous 2 years. My question is: Is the 30 day vacation payout included in the 10% limit or is it considered separate? For example, if I averaged 100,000 over the last 2 years, made 110, 000 this year (10% over the average of the previous 2 years) is my vacation payout of 15,000 included in my final average earnings or is it excluded because it would pierce the 10% cap?

    Reply
    1. NYSLRS Post author

      Yes, assuming you are in a retirement plan that includes payment for up to 30 days of accumulated vacation in the calculation of your final average earnings, your vacation payout would be included in the final average earnings cap.

      For account-specific information about how this may apply in your situation, please email our customer service representatives using our secure email form. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
  3. Patricia Smith

    I still haven’t received information about buying my prior service credit back; it’s over 2 years of waiting now. I’m considering retirement, but would like this resolved beforehand. I should then be a tier 4 instead of 6. Will filing for retirement take this into consideration?

    Reply
    1. NYSLRS Post author

      We apologize for the delay, but the NYSLRS E-News Team does have access to your personal account information, so we cannot check the status of your request.

      For questions about your service credit request, please call our customer service representatives at 1-866-805-0990 (or 518-474-7736 in the Albany, NY area), press 2, then follow the prompts. You can also email them using our secure email form. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
  4. Diana Trask Daley

    I retired in May 2019. I am still waiting for my final average salary to be calculated. When I retired I was told it would take 18 months; it has now been 28 months. What is taking so long? I have sent two inquires. I was thinking the lack of a contract may be a contributing factor but a new contract was passed and I received my retroactivce pay from the new contract. Where is my final average salary calculation?

    Reply
    1. jan

      Hi Diana , any progress. I retired april 2021 and I have had issues since. if your issue was resolved please inform……I”m not looking forward to waiting another year just to be tossed back into the wringer

      Reply
  5. Virginia Mulcahy

    I retired on 3/30/20 and still haven’t received my final retirement benefit. I emailed and called numerous times and get the same answers. “We’re working on it and it takes time” it’s been 19months! Help!

    Reply
    1. NYSLRS Post author

      We apologize for the delay. Your message is important to us and we have sent you a private message in response.

      Reply
    2. Kevin McCarthy

      Totally understand the frustration! Just got finalized 32 months! Ret in 2019! After I complained on this blog low and behold “they said” they finally received documents from my municipality that made this all possible? Really? checked and no requests were sent from Or to NYS over the last 2 years on my behalf. BS flag has been raised. Hang in there, don’t give up!

      Reply
      1. Virginia Mulcahy

        I just received a phone call from a “supervisor “ who said there is no timetable on when mine will be processed. Same answers I always get. This needs to be brought to the attention of the media or whoever oversees the retirement system.

        Reply
        1. Marilyn

          I retired in April of 2020 and have not received my final average salary. I have emailed the retirement system 3 times and get the same generic answer. I was just wondering if you have received your FAS yet. I was thinking of contacting my union to see if something could be done.

          Reply
  6. Kevin McCarthy,

    I have been requesting when my (FAE) Final Average Earnings will be done with no response since fall of 2019 (been retired since Jan 2019). Sent 7 emails and 5 phone calls and I get we will get to it soon. 32 months? How long does it take? More than 3 years? Lots of inquiries……………no answers.

    Reply
    1. NYSLRS Post author

      We apologize for the trouble you are having. Your message is important to us and we have sent you a private message in response.

      Reply
    2. Louis Balfan

      I also retired in October 2019 and am still waiting for my FAS calculation. Was told it would take 16-18 months pre-covid but its been nearly 28 months. Can’t imagine what takes so long as its merely a relatively simple calculation. Calls to NYSLRS were fruitless. I’m sure people have died waiting for this response and I’m beginning to wonder if I will ever hear from them. Please help.

      Reply
          1. NYSLRS Post author

            Your message is important to us and we have sent you a private message in response.

  7. tj12205

    I retired 04/01/20 with 35 years in the NYS retirement system and my final average salary was miscalculated by $3500 less than the actual amount. I called numerous times over the last year and each time I am told there is a back log. Curious how log does it take for this correction to be made.

    Reply
    1. NYSLRS

      For current processing times, please contact our customer service representatives. You can email them using the secure email form on our website (http://www.emailNYSLRS.com). One of them will review your account and respond to your questions. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
  8. D Pooch

    I left my NYS Retirement job after 18.15 years of service, and then started work for the Federal Government. I have now worked for the federal govt for 12 years. Next year I turn 55, and I want to start collecting my NYS Retirement. My question is do I get any credit for my Federal Service since it is another government job?

    Reply
    1. NYSLRS Post author

      No, you cannot get service credit toward a NYSLRS pension from employment with the federal government. Generally, members in regular retirement plans face pension reductions if they retire before their full retirement age (62 or 63, depending on their tier).

      Most members can use the benefit calculator in Retirement Online to estimate their pensions based on information we have on file for them. Sign in to your account, go to the My Account Summary area of your Account Homepage and click the “Estimate my Pension Benefit” button. If you don’t already have an account, go to the Sign In page and click the “Sign Up” link under the “Customer Sign In” button.

      For account-specific information about your benefits, please email our customer service representatives using our secure email form. One of our account representatives will be able to answer your questions. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
  9. Pete smith

    So I I averaged 25.000 in overtime in 3 consecutive years …I will receive a extra 12.500 a years added to my pension??….I’m tier 4..5/62

    Reply
    1. NYSLRS Post author

      You can only earn one year of service credit in a single year. However, overtime payments would generally be included in calculating your final average earnings (FAE).

      For more information, please check your retirement plan booklet on our Publications page or email our customer service representatives using our secure email form.

      Reply
  10. Andrea P

    I received my retirement statement and the reported salary was way off what my current pay stub has on it. I emailed my HR dept and they sent me to BSC and they sent me to Retirement system. I emailed and got no response. I need to get it straightened out soon. Any chance I can get a response?

    Reply
    1. NYSLRS Post author

      We apologize for the trouble you had trying to reach our customer service representatives. Your message is important to us and we have sent you a private message in response.

      Reply
  11. Karen C. Bailey

    I applied to get employment credit for two jobs previous to my current County employment, a part time County job at the library and a RPT job at an area public High School, working in the library. That was pre Covid 19. I still have not heard if buying back that employment time is possible. Did I get lost in the Covid shutdown???

    Reply
    1. NYSLRS

      We apologize for trouble you are having. Your message is important to us and we have sent you a private message in response.

      Reply
    1. NYSLRS Post author

      Depending on when you joined the Retirement System, all or part of a lump sum payment for accumulated vacation could be used in calculating your final average earnings.

      For more information, please check your retirement plan booklet. For account-specific questions, please email our customer service representatives using our secure email form. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
  12. April Amber Suriani

    Can I allow my holiday pay to be factored into my FAE by not taking the holidays off in my final three years of service? Can I substitute a vacation day on a holiday, and bank the holiday?

    Reply
    1. NYSLRS Post author

      We recommend you talk to your employer’s human resources (personnel) office about whether you can bank holiday pay.

      Then, for FAE information specific to your retirement plan and Tier, please email our customer service representatives using our secure email form. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
  13. Jagdish Mistry

    If an employee is working fulltime at a NY County job and also works fulltime in another NY County job are earnings, combined from both to calculate FAS?

    Reply
    1. NYSLRS Post author

      A NYSLRS member cannot receive more than one year of service credit in a single year, but earnings from two employers may be combined to calculate your final average earnings.

      For information specific to your retirement plan and tier, please email our customer service representatives using our secure email form. Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
      1. JACK JOSEF

        What about if you transfer time from another retirement system in NY state, like NYCERS, to NYSLRS? Does the same rule apply if it is working concurrently at both NYCERS and NYSLRS. If transfer your time from NYCERS to NYSLRS, does the earning are combined to calculate the FAS.? is there some limit or cap on the earnings part? I know you can’t receive more than one year of service credit for a particular year. thanks

        Reply
        1. NYSLRS Post author

          For account-specific information about how this may apply in your particular situation, please email our customer service representatives using our secure email form. Filling out the secure form allows them to safely contact you about your personal account information. One of our account representatives will be able to answer your questions.

          Reply
    1. NYSLRS Post author

      For questions about processing times, please call our customer service representatives at 1-866-805-0990 or email them using the secure email form on our website (http://www.emailNYSLRS.com). Filling out the secure form allows them to safely contact you about your personal account information.

      Reply
      1. suze7799

        These articles are great, but none of them ever bring out the fact that there is a 5 year look back, not just a 3 year calculation with Tier 4 ( not sure of the other Tiers). This 5 year look back can have a negative impact on your 3 year calculation if at any time in those 5 years you received a raise of income 10% or greater. This is what happened to be reducing my FAE and my monthly pension.

        Reply

Leave a Reply