Three Year Final Compensation Clause Samples
The "Three Year Final Compensation" clause defines how an employee's retirement or pension benefits are calculated based on their highest average earnings over any consecutive three-year period of employment. Typically, this means the employer will review the employee's salary history and select the three years—often the most recent or highest-paid years—where the average compensation was greatest. This method ensures that the benefit calculation reflects the employee's peak earning years, thereby providing a fairer and often higher retirement benefit, and helps standardize the process for determining final compensation amounts.
Three Year Final Compensation. For employees hired after February 5, 2012 (or as soon thereafter as practicable), the retirement allowance of a PERS member shall be based on the 36 highest paid consecutive months under the plan. (Government Code Section 20037).
Three Year Final Compensation. For employees hired after February 5, 2012 (or as soon thereafter as practicable), the retirement allowance of a Public Employees Retirement System (“PERS”) member shall be based on the 36 highest paid consecutive months under the plan. (Government Code Section 20037). D.1.d. Contributions toward PERS Retirement Effective February 5, 2012 or as soon as practicable, the City shall cease picking up two percent (2.0%) of the employee’s nine percent (9%) share of contributions to the Public Employees’ Retirement System (PERS). Each employee shall be responsible for paying that two (2.0%) of the full employee share of PERS contributions, with state and federal income tax on the PERS member contribution deferred to the extent permitted by Internal Revenue Code, 26 USC Section 4.14(h)(2). The City shall continue to pay seven percent (7.0%) of the employee’s nine percent (9.0%) share, and the City shall make the employer contribution to PERS for each employee. The City shall pay for any increase in the employer rate and shall retain any savings from a decrease in the employer rate and for contribution credits (rebates) from PERS. During the life of this Agreement, earnings may accrue to the City by reason of a reduction of the City’s contribution to PERS. Effective June 23, 2013, the City shall cease picking up 5.5% of the employee’s nine percent (9%) share of contributions to the Public Employees’ Retirement System (PERS). Each employee shall be responsible for paying that 5.5% of the full employee share of PERS contributions, with state and federal income tax on the PERS member contribution deferred to the extent permitted by Internal Revenue Code, 26 USC Section 4.14(h)(2). The City shall continue to pay the 3.5% of the employee’s nine percent (9.0%) share, and the City shall make the employer contribution to PERS for each employee. The City shall pay for any increase in the employer rate and shall retain any savings from a decrease in the employer rate and for contribution credits (rebates) from PERS. During the life of this Agreement, earnings may accrue to the City by reason of a reduction of the City’s contribution to PERS. Effective June 22, 2014, the City shall cease picking up nine (9%) of the employee’s nine percent (9%) share of contributions to the Public Employees’ Retirement System (PERS). Each employee shall be responsible for paying the full employee share of PERS contributions, with state and federal income tax on the PERS member contribution def...
Three Year Final Compensation. For new PEPRA members, provides that final compensation means the highest average annual pensionable compensation earned by a member during a period of at least 36 consecutive months. Also prohibits a public employer from adopting a final compensation period of less than three years for classic members who are currently subject to a three-year final compensation period.