Your Final Average Compensation (FAC)

It doesn't matter if you retire during the school year or at the end, or if you receive some of your wages during the summer months after you retire. We will capture all that you earned during your FAC period. We will also review any contract settlement that occurs after you retire.

After you file your retirement application, we will ask your school to verify your final wages and we'll then determine what will count in your FAC. 

Types of compensation included in your FAC.

The types of pay used to calculate your final average compensation can include:

• Wages. Gross wages earned while performing the duties of your position, including compensation for extra work assignments such as coaching. 
• Longevity pay.
• Vacation or holiday pay while absent from work.
• Sick leave pay (including weekly workers' compensation) while absent from work.
• Overtime pay.   
• Merit pay for achieving specific performance objectives.

The following payments are NOT included in your FAC:

• Unused sick or vacation time.
• Bonus payments. 
• Retirement incentive payments. 
• Health and life insurance premiums.
• Long-term disability payments.
• Fringe benefits.
• In-kind compensation.
• Sabbatical leave stipends.
• Service credit purchased by your employer on your behalf.
• Termination pay.
• Expense payments.
• Payments in lieu of health insurance or other fringe benefits.
• Payments for the specific purpose of increasing your final average compensation.

Note: Section 401(a)(17) of the IRS code can affect the FAC, and therefore the pension payments, of certain highly compensated individuals who were hired after October 1, 1996. The rule places a limit ($245,000 in 2010) on the maximum compensation allowed for retirement benefit computations. Any wages you earn above this limit, which is set by IRS each year, may not be included in your pension calculation.