Updated October 2026
Final Average Salary (FAS) — sometimes called Final Average Compensation, Average Final Compensation, or Highest Average Salary depending on the state — is the salary figure the entire pension formula is built on. Despite the name, it is almost never just your last year's pay. Understanding exactly what gets averaged, over what period, is the single most common source of surprise when teachers compare their own estimate to what their state system actually pays.
Every state defines a specific window: commonly the highest 3, 5, or 8 years of your career (not necessarily your last 3-8 years — in most systems it's whichever years paid the most, as long as they're within a certain number of years of retirement or consecutive). A small number of states (Georgia TRS is a notable example) use as few as the highest 2 consecutive years, which is unusually generous; others, like Illinois TRS for post-2011 hires, average the highest 8 years within the final 10 — a much longer window that dilutes the effect of late-career raises.
Consider a teacher who gets a significant raise (a stipend, a department-head role, a late-career promotion) in their final working years. Under a 3-year FAS window, that raise meaningfully lifts the average. Under an 8-year window, the same raise is blended with five additional, lower-paid years and barely moves the average at all. This is exactly why two states with an identical multiplier can produce noticeably different pensions for teachers with the same career-ending salary.
Some states require the highest-earning years to be consecutive; others allow any years (consecutive or not) within a lookback window. A consecutive-years requirement can matter if your career included a pay cut, a leave of absence, or a move to part-time status at some point — a non-consecutive rule generally works more in your favor in that situation.
Many states shortened or lengthened the FAS averaging window as part of pension reforms, typically applying the new rule only to people hired after a certain date. It's common to see a state use a 3-year window for its "legacy" tier and a 5- or 8-year window for everyone hired after a reform year — meaning two teachers at the same school, hired a few years apart, can be on entirely different FAS rules. Always confirm which tier applies to your own hire date.
If you don't yet know your exact FAS, a reasonable starting estimate is your current salary (or your expected salary in your highest-paid working years) — understanding that it will be an average, so a single unusually high or low year has less effect than it would on a true "final salary" figure. Your state system's member portal typically shows your actual running FAS calculation, which is the authoritative number to use once you're a few years from retirement.
This is an educational explainer, not financial or retirement advice. Your state's exact FAS definition and averaging period should be confirmed with your official retirement system.