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 Buydown / Annual Leave Redemption
Government Code Section 31461(b)(2) instructs VCERA to limit the number of annual leave or vacation redemption hours that may be included in retirement compensation to the maximum redeemable hours allowed by Memorandum of Agreements (MOA) for each calendar year. As a reminder, for PEPRA members, Vacation Buydown/Annual Leave Redemption is not includable in final average compensation.
Depending on membership type, VCERA will look at the highest 12 or 36 consecutive months of compensation at retirement. Within that highest measurement period, VCERA will include the number of redeemed leave hours that the applicable MOA allows a member to redeem. For example, if a member’s MOA allows a maximum leave redemption of 200 hours per calendar year, then VCERA will only include up to 600 hours of redeemed leave in a 36-month measurement period for purposes of retirement compensation. Please refer to your appropriate MOA to locate your specific annual vacation redemption limit.