When you retire, you will get a monthly pension benefit for life. Your base benefit is calculated using a formula, as defined by law, using the following factors:

• Final Average Pay (FAP) – The average of your highest 36 consecutive months of pay
• Multiplier – A number established by the legislature
• Credited Service – Your years and months of credited service earned, purchased, or transferred, and unused sick leave (if applicable)

(Base benefit is the amount before any reductions, taxes, or other deductions.)

To answer your question specifically, the FAP is based on the highest 36 consecutive months in your pay history, not on fiscal years. For most people that ends up being at the end of their state service, but not always.  

Estimates are based on your final average pay (FAP), which is your highest consecutive 36 months of pay relative to the retirement date entered. When you run a benefit estimate of your own, it will project your current salary until the retirement date you entered. The system will look at your entire pay history to find your FAP/highest 36 consecutive months. That means part of your FAP may be in the future and part of it may be in the past – as long as it is 36 consecutive months. The closer you get to your retirement date, the more accurate your benefit estimate will be.

Please note:

• Wait for a pay raise to be reflected in our system before running an estimate. (If you get a pay raise this month, it will be reported to MOSERS next month, so for a January pay raise, our system won’t have that information and it won’t be reflected in an estimate until mid-February.)
• If you run an estimate that includes BackDROP, any pay earned during the BackDROP period you elect is not considered in your FAP.
• It’s important to remember that a benefit estimate is just that, an estimate, not a guarantee. They are as accurate as the assumptions used to produce them. See Calculating Your Benefit Estimate for more information.

Based on your example and assumed date of retirement, your estimate would include a salary of $3,000 for 24 months and a salary of $2500 for 12 months for your FAP. 

In calculating pension benefit amounts, for final average pay (FAP), we use gross salary (before taxes, health insurance, cafeteria plan, etc.).

Yes, your final average pay, for the purpose of calculating your pension benefit, is your highest 36 consecutive months pay, regardless of when that occurs in your pay history. We will look at your entire pay history, as reported by your employer, and find the “high 36”. This can include overtime pay and holiday pay. All 36 months must be consecutive.

Your base benefit is calculated using a formula, as defined by law, that takes into account the following factors:

• Final Average Pay (FAP) – The average of your highest 36 consecutive months of pay

• Multiplier – The multiplier established by the legislature

• Credited Service – Your years and months of credited service earned, purchased, or transferred, and unused sick leave (if applicable)

  (Base benefit is the amount before any reductions, taxes, or other deductions.)

  Here is an example of how the base benefit formula works for a person whose gross pay is $50,000 per year (for at least 36 months) and who retires under MSEP 2011 with 25 years of service:

   FAP ($4,167) x MSEP 2011 Multiplier (.017) x Credited Service (25) = $1,770.98 monthly base benefit in retirement

When you retire, you will get a monthly pension benefit for life. Your base benefit is calculated using a formula, as defined by law, that takes into account the following factors:

• Final Average Pay (FAP) – The average of your highest 36 consecutive months of pay

• Multiplier – The multiplier established by the legislature

• Credited Service – Your years and months of credited service earned, purchased, or transferred, and unused sick leave (if applicable)

(Base benefit is the amount before any reductions, taxes, or other deductions.)

 To answer your questions, specifically,

• Is it the top three in all years of service? Do they have to be in a row? Can they be spread out? It is your highest 36 consecutive months pay. We will look at your entire pay history and find the “high 36”.  All 36 months must be in a row.
• Does that include Backdrop time? No. If you elect BackDROP at retirement, any pay earned during the BackDROP period does not count in your “high 36”.
• What if your income for the years served are higher than the salary of a specified job? For example, if you made $70,000 but your max pay for that job is $49,000 what is your retirement based on? We look at your gross pay, as reported by your employer, which may include overtime pay and holiday pay. We do not look at your job title or pay ranges.

Here is an example of how the base benefit formula works for a person whose gross pay is $50,000 per year (for at least 36 months) and who retires under MSEP 2000 with 25 years of service:

 FAP ($4,167) x Multiplier (0.017) x Credited Service (25) = $1,770.98 monthly base benefit in retirement

Retirement benefits for general state employees (including university employees) are calculated using a three-part formula: FAP x Multiplier x Credited Service = Monthly pension benefit payment. 

Learn more about your benefits in the Summary of Pension Benefit Provisions (All Plans) and by plan on our website: MSEP, MSEP 2000, and MSEP 2011.

Pension benefits are calculated using a formula, which is: Final Average Pay (FAP) x a Multiplier* x Credited Service = Monthly Base Benefit

The additional earnings for working in a second job may increase their final average pay. Statutorily required employer and employee contributions must be paid to the System on any such compensation. See MOSERS Board Rule 2-8 for details. 

However, state law says an employee can earn only one day of service credit for each day worked so it would not increase their credited service in terms of retirement eligibility or for calculating their benefit amount.

Below is a simplified example showing how working in an additional position could potentially impact an employee’s benefit. Employees should contact a MOSERS benefit counselor to get an estimate for their particular situation:

Working in one full-time position making $28,307 per year and retiring in MSEP 2000 with 25 years of service:

$28,307/12 months = $2,358.92 as monthly final average pay

FAP ($2,358.92) x Multiplier (0.017) x Credited Service (25) = $1,002.54 monthly base benefit in retirement

Working in one full-time position making $28,307 per year and retiring in MSEP 2000 with 25 years of service plus working in a part-time position at the same rate of pay (an extra 1,000 hours at $13.61 per hour per = $13,610 per year for 3 years):

$41,917/12 months = $3,493.08 as monthly final average pay

FAP ($3,493.08) x Multiplier (0.017) x Credited Service (25) = $1,484.56 monthly base benefit in retirement

*The multiplier for MSEP is 1.6%; the multiplier for MSEP 2000 and MSEP 2011 is 1.7%. 

Yes, overtime can increase a member’s pension benefits.

Retirement benefits for general state employees are calculated using a three-part formula: Final Average Pay (FAP)  x credited service  x  a multiplier =  Monthly Base Benefit

To calculate your pension benefit, we will use your highest 36 full consecutive months of pay – wherever that occurs in your individual pay history. 

In identifying your “high 36” months, overtime pay is included in the pay period for which it was earned. 

The multiplier for general state employees in MSEP is 1.6%; it is 1.7% for general state employees in MSEP 2000 and MSEP 2011.