Ask Jack: How does CalSTRS determine final compensation?
Final compensation is the highest average annual compensation earnable during a specified period of CalSTRS-covered paid employment.
If you have fewer than 25 years of service credit, your final compensation is based on your highest average compensation earnable during any period of 36 consecutive months of paid employment covered by CalSTRS under the CalSTRS 2% at 60 benefit structure.
If you have at least 25 years of service credit or more, this period is 12 consecutive months under the CalSTRS 2% at 60 benefit structure. CalSTRS will automatically determine your final compensation by searching your past 15 years of records. For members under the CalSTRS 2% at 62 benefit structure, your final compensation is based on your highest average annual compensation earnable during any 36 consecutive months, and you are not eligible for the one-year final compensation benefit.