Final Average Compensation
One of the factors used to calculate your retirement benefit is your final average compensation (FAC),* which is based on your benefit tier and/or hire date. The time period in which your FAC is earned is called your “measurement period”:
For Safety Tier 1 and General Tier 1 members: Highest 12 consecutive months (26 pay periods) of “compensation earnable,” as defined in Government Code section 31461.
For all other members:
- Hired prior to January 1, 2013: Highest 36 consecutive months (78 pay periods) of “compensation earnable,” as defined in Government Code section 31461.
- Hired on or after January 1, 2013: Highest 36 consecutive months (78 pay periods) of “pensionable compensation,” as defined in Government Code section 7522.34.
Vacation/Annual Leave Redemption
Your eligibility and hours available for vacation/annual leave redemption (“buydown”) are specified in your bargaining group’s Memorandum of Agreement (MOA). However, the Board of Retirement determines the actual amount of redemption that can be included in the final average compensation used to calculate your retirement benefit. The redeemed hours included in your final average compensation may be less than the actual amount you redeemed during your 12-month or 36-month measurement period because it is limited to the annually accrued hours less the hours required to be “taken off” for eligibility purposes.
For example, for a Tier 2 management employee accruing 11.08 hours per pay period, VCERA would multiply 11.08 by 78 pay periods (864.24 hours), then deduct 240 hours required to be taken off within the 36-month measurement period, resulting in 624.24 hours as a maximum to include in final average compensation.