When a New York City educator retires, usually at the end of the school year, the TRS calculates the Final Average Salary (FAS) of the last three school years. However, the FAS does not include any additional pay over 10% of the FAS so as to not to drive up the educator's pension by taking unlimited overtime in the last year. While that limitation is well known the next limitation to the educator's pension is not.
Educators at the end of the school year gets payments for the summer months of July and August. These summer payments are not extra checks but represent earned wages from the previous two semesters that have been smoothed out so that educators receive bi-monthly checks throughout the calendar year. However, it appears the TRS does not include the July and August payments when calculating the FAS.
The TRS has remained mum on the apparent shortchanging of their educator pension calculation and a lawsuit was filed in July of this year to force TRS to include the July and August payments. While the amount that TRS shortchanges the educator varies widely, I used retired teacher Irving Lieblich's pension calculation, as reported in the New York Post as the example.
According to Mr. Lieblich since he retired in June of 2011, he has been shortchanged on his pension by $241 his first year since they didn't include the summer months, when he made $93,656 as a 2011 base salary. Instead, those two months were replaced by the 2010 base salary that saw him receive only $90,054. Consequently, Mr. Lieblich is owed $1,446 according to his calculations since retiring.
Hopefully, Mr. Lieblich's lawsuit is successful and the TRS will include the two month summer pay when they calculate the educator's pension..