Your Final Average Compensation (FAC) is an important factor in determining your retirement pension, but it’s just one part of the formula used to calculate your monthly benefit. The full formula is:

Years of Service x FAC x Age Factor = Monthly Pension Benefit

FAC is calculated differently depending on the plan you are in:

• Plans 1 & 2: FAC is your highest year of salary, divided by 12.
• Plans 3, 4, 5 & 6: FAC is the sum of your highest 3 years of salary, divided by 36 (these years don’t need to be consecutive).
• Plan 7: FAC is the average of your highest 36 consecutive months of salary.

A salary increase will affect your FAC differently, depending on your plan, as well. To use the higher salary when calculating your monthly pension benefit:

• For Plans 1 & 2: You need the higher salary for at least 1 year.
• For Plans 3-6: You need the higher salary for at least 3 years.
• For Plan 7: You need the higher salary over 36 consecutive months.

Key Points:

• Your salary is just one part of the formula used to determine your monthly pension benefit. The full formula also includes your years of service and age factor at the time of retirement.
• If you will be receiving a salary increase and want to maximize its impact on your monthly pension benefit, you’ll need to maintain the higher salary for 1 year, 3 years, or 36 consecutive months, depending on your plan.
• The more years you work and the higher your FAC, the higher your monthly pension benefit.