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What Types of Pay Can Appear in Your Highest Average Monthly Salary?

Tiers 1, 2, and 3

ACERA will include the following pay earned during your Final Compensation Period in your Highest Average Monthly Salary:

  1. Your base pay (gross)
  2. Footnotes, which are other types of pay based on skills and education. To see whether your other pay types are included in your Highest Average Monthly Salary calculation, visit the Pay Codes page. Overtime is not included

Additionally, if your employer pays you for earned but unused vacation during your Final Compensation Period through Vacation Sell and/or Vacation Payoff, ACERA will include this payment in your Highest Average Monthly Salary up to a limit. Overtime is not included.

  1. Vacation Sell (or Sell) is when you sell your earned vacation to your employer while you’re still actively working and receive monetary compensation for it.
  2. Vacation Pay-Off (or Cash-Out) happens when you have vacation time that is still on the books when at the time you stop working (e.g., at retirement). At that time, your employer will compensate you monetarily for it.

The amount of vacation ACERA will include in your Highest Average Monthly Salary is limited to the amount of vacation that’s “earned and payable” to you during employment in your final compensation period. For more information on these limits see the next post Limits on Vacation Pay in Your Highest Average Monthly Salary.

Stand-by and On-call Pay

Stand-by and on-call pay will be included or excluded from the highest average monthly salary calculation based on a member-by-member review at the time of retirement. The includable amount will be based on the same amount of compensation earned by other employees in the same position. Amounts beyond those limits may be considered a benefit enhancement and therefore not includable

Tier 4

ACERA will include the following pay earned during your Final Compensation Period in your Highest Average Monthly Salary:

  1. Your base pay (gross)
  2. Footnotes. Some footnotes may be included. Footnotes are other types of pay based on skills and education. To see whether your other pay types are included in your Highest Average Monthly Salary calculation, visit the Pay Codes page. Overtime is not included

The Public Employees Pension Reform Act of 2012 stipulates that compensation for unused vacation is not included in Tier 4 members’ Highest Average Monthly Salary calculations.

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