Your average monthly salary is the average of your 3 consecutive highest years of earnings divided by 36. Beginning with the first pay period in 1986, any overtime pay you received was excluded from the calculation of your Average Monthly Salary.
Federal law limits the amount of earnings that can be taken into account when determining you pension benefit. Annual earnings that exceed $200,000 in a calendar year can not be taken into accounts when determining your pension benefit. This limit was increased to $205,000 for 2004, $210,000 for 2005 and $220,000 for 2006. This limit will be adjusted in future years as the limit is increased by the IRS.