2023 New York Laws › RSS - Retirement and Social Security › Article 11 - Limitations Applicable to New Entrants › 443 - Final Average Salary.

§  443.  Final  average  salary.  a.  The  salary  base  used  for the
  computation of benefits upon  retirement,  hereinafter  called  in  this
  article   final  average  salary,  applicable  to  all  members  of  the
  retirement systems who are subject to the provisions  of  this  article,
  shall  be  the  average  salary earned by such a member during any three
  consecutive years which provide the highest average salary, exclusive of
  any form of termination pay (which shall  include  any  compensation  in
  anticipation  of  retirement),  or  any  lump  sum  payment for deferred
  compensation, sick leave, or accumulated vacation credit, or  any  other
  payment  for  time not worked (other than compensation received while on
  sick leave or authorized leave of absence); provided,  however,  if  the
  salary  or  wages  earned during any year included in the period used to
  determine final average salary  exceeds  that  of  the  average  of  the
  previous  two  years by more than twenty percentum, the amount in excess
  of twenty percentum shall be excluded  from  the  computation  of  final
  average  salary. Where the period used to determine final average salary
  is the period which immediately precedes the  date  of  retirement,  any
  month  or  months  (not  in  excess  of twelve) which would otherwise be
  included in computing final average salary but during which  the  member
  was  on  authorized leave of absence at partial pay or without pay shall
  be excluded from the computation of final average salary and  the  month
  or  an equal number of months immediately preceding such period shall be
  substituted in lieu thereof.
b. Notwithstanding the provisions of subdivision a  of  this  section,
  with  respect to the members of the New York state employees' retirement
  system, the New York state and local police and fire  retirement  system
  and  the  New  York  city teachers' retirement system, the final average
  salary, shall be equal to one-third of the highest total  salary  earned
  during  any  continuous  period  of  employment for which the member was
  credited with three years of service credit, exclusive of  any  form  of
  termination pay (which shall include any compensation in anticipation of
  retirement), any lump sum payment for deferred compensation, sick leave,
  or accumulated vacation credit, or any other payment for time not worked
  (other  than  compensation  received  while  on sick leave or authorized
  leave of absence); provided, however, if the salary  earned  during  any
  year  of credited service included in the period used to determine final
  average salary exceeds the average of the salaries of the  previous  two
  years  of credited service by more than twenty per centum, the amount in
  excess of twenty per centum shall be excluded from  the  computation  of
  final average salary.
c.  Notwithstanding  the  provisions  of  subdivisions a and b of this
  section, with respect to police officers and firefighters as defined  in
  section  four hundred fifty of this chapter, the final average salary of
  an employee who has been a member of a retirement system for  less  than
  one  year  shall  be the projected one year salary, with the calculation
  based upon a twelve month projection of the sums earned in  the  portion
  of the year worked. If a member has been employed for more than one year
  but less than two years, then the member's final average salary shall be
  the  average  of the first year and projected second year earnings based
  upon the calculation above, and if more than two years,  but  less  than
  three  years,  then  one-third  the  total  of  the  first  two years of
  employment plus the  projected  third  year's  earnings,  calculated  as
  indicated above.
d.  Notwithstanding  the  provisions  of  subdivisions a and b of this
  section, the final average salary of an employee who has been  a  member
  of  the  New York city employees' retirement system or the New York city
  teachers' retirement  system  for  less  than  one  year  shall  be  the
  projected  one  year  salary,  with  the calculation based upon a twelve

  month projection of the sums earned in the portion of the  year  worked.
  If  a  member has been employed for more than one year but less than two
  years, then the member's final average salary shall be  the  average  of
  the  first  year  and  projected  second  year  earnings  based upon the
  calculation above, and if more than  two  years,  but  less  than  three
  years,  then  one-third  the  total of the first two years of employment
  plus the projected third year's earnings, calculated as indicated above.
e. Subject to the provisions of subdivision d  of  this  section,  and
  notwithstanding  the  provisions  of subdivision a of this section, with
  respect to members of the New York city employees' retirement system and
  the New York city board of education retirement system who  are  subject
  to  the  provisions  of  this article, the final average salary shall be
  determined pursuant to the provisions of paragraph twelve of subdivision
  e of section 13-638.4 of the administrative code  of  the  city  of  New
  York.
f.  Notwithstanding  the provisions of subdivisions a, b and c of this
  section, a participating employer may elect, pursuant to the  provisions
  of  paragraph d of subdivision nine of section three hundred two of this
  chapter, to have the provisions of such paragraph apply  to  the  police
  officers  and  firefighters  in  its  employ  who  are  subject  to  the
  provisions of this article.
f-1. A demand in collective negotiations for  the  additional  pension
  benefit  provided  by subdivision f of this section shall not be subject
  to the provisions of paragraph (b) or (c) of subdivision four of section
  two hundred nine of the civil service law,  nor  shall  such  demand  be
  subject to any provision for interest arbitration contained in any local
  law, resolution or ordinance adopted by any governmental entity pursuant
  to  subdivision  one  of section two hundred twelve of the civil service
  law.
g. Notwithstanding the provisions of subdivisions  a  and  c  of  this
  section,  the  benefits for the first twenty years or less of service of
  members of the New York city police pension fund,  subchapter  two,  who
  are  subject  to the provisions of this article, and members of the fire
  department  pension  fund,  subchapter  two,  who  are  subject  to  the
  provisions  of  this article, shall be determined by using a salary base
  equal to the salary earned by such member  during  the  one-year  period
  immediately  prior  to  retirement  or  separation  from  service due to
  vesting, exclusive of any form of termination pay (which  shall  include
  any compensation in anticipation of retirement), or any lump sum payment
  for  deferred  compensation, sick leave, or accumulated vacation credit,
  or any other payment  for  time  not  worked  (other  than  compensation
  received  while on sick leave or authorized leave of absence); provided,
  however, if the salary  or  wages  earned  during  the  one-year  period
  immediately  prior  to  retirement  or  separation  from  service due to
  vesting exceeds that of the previous one-year period by more than twenty
  per centum, the amount in excess of twenty per centum shall be  excluded
  from  the  computation  of  final  average  salary. In determining final
  average salary, any month or months (not in excess of three) which would
  otherwise be included in computing final average salary but during which
  the member was on authorized leave  of  absence  without  pay  shall  be
  excluded  from  the computation of final average salary and the month or
  an equal number of months immediately preceding  such  period  shall  be
  substituted in lieu thereof.
h.  Notwithstanding  any  general,  special  or  local  law,  charter,
  administrative code, agreement, resolution or rule or regulation to  the
  contrary,  the  salary  base  for  members  of the city of New York fire
  department pension fund whose employment with the fire department of the
  city of New York commenced on or after the first of July,  two  thousand

  to  whom  this article otherwise applies shall be determined in the same
  manner as the salary base for members of  the  city  of  New  York  fire
  department pension fund whose employment with the fire department of the
  city of New York commenced before the first of July, two thousand.