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  • Benefits Tip: Final Average Pay (FAP)

    Oct 14, 2020, 9:30 AM By MOSERS

    We often receive questions from members regarding Final Average Pay (FAP), and whether pay earned during the BackDROP period (or after they reach their normal retirement eligibility date) is included in FAP.

    Please share this information with your employees:

    How is Final Average Pay (FAP) calculated?

    Whether or not pay, for a given period, will be considered in determining your Final Average Pay (FAP) depends on if you elect BackDROP* (if eligible); not when you reach normal retirement eligibility.

    To calculate your pension benefit, we will use your highest 36 full consecutive months of pay – wherever that occurs in your individual pay history. Most people earn their highest 36 consecutive months of pay in their last three years of state employment, but not always. If you become eligible for and elect the BackDROP upon retirement, your FAP will be calculated using your MOSERS-covered work history prior to your BackDROP date. In other words, pay (and service) during the BackDROP period is excluded when calculating your monthly benefit amount.

    If at retirement, you do not elect BackDROP, we will review your entire pay history and find the 36-month period with your highest pay (regardless of whether that is before or after you might hit normal retirement eligibility) and will use that in calculating your monthly benefit. You may elect not to take BackDROP if you want all of your pay and service to count. In most cases, opting not to take BackDROP will increase your monthly benefit amount.

    *BackDROP is available only to general state employees who are members of MSEP or MSEP 2000.