Your highest five years of salary are used to determine your retirement benefit. The five years do not have to be consecutive. However, it must be 60 consecutive months if your high-five is being used in a combined service calculation with another retirement plan.
Average monthly salary is based on gross salary. Contributions to your MNDCP, Health Care Savings Plan (HCSP), Social Security, etc. do not lower your high-five average monthly salary.
Sick & vacation leave pay
-
Sick and vacation leave you use before you end your employment is included in your high-five average salary.
-
Retirement deductions are not taken on unused sick or vacation leave paid in a lump sum after you end employment; therefore, unused leave payoffs are not included in your high-five average salary.
How to calculate your high-five average monthly salary
When calculating your high-five average monthly salary, we use the highest five years rather than a calendar or fiscal year salary. For example, your high-five average salary could start on March 1 and run through February. It is important to note that the five years do not have to be consecutive. However, each year of your high-five needs to have the same start and end date.
Your employer reports your salary along with your retirement deduction each pay period to MSRS. This allows us to accurately calculate your high-five average monthly salary.
Example of the calculation to determine your average monthly salary:
The assumptions |
|
Year |
Earnings |
The calculations |
|
$300,000 (total high-five salary) รท 60 months $5,000 (average monthly salary) |