(a) âCreditable compensationâ means the following remuneration that is paid in cash by an employer to all persons in the same class of employees for performing creditable service in that position: (1) Salary or wages paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement. (2) Remuneration that is paid in addition to salary or wages, provided it is paid to all persons who are in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed. (b) Creditable compensation shall include: (1) Remuneration that is paid for the use of sick leave, vacation leave, or an employer-approved compensated leave of absence, except as provided in paragraph (4) of subdivision (d). (2) Member contributions that are picked up by an employer pursuant to Section 22903 or 22904. (3) Amounts that are deducted from a memberâs remuneration, including, but not limited to, deductions for participation in a deferred compensation plan; deductions to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code. (4) Any other payments the board determines to be âcreditable compensation.â (c) Any creditable compensation determined by the system to have been paid to enhance a memberâs benefits shall not be credited under the Defined Benefit Program. Contributions on that compensation shall be credited to the Defined Benefit Supplement Program. A presumption by the system that creditable compensation was paid to enhance a memberâs benefits may be rebutted by the member or by the employer on behalf of the member. Upon receipt of sufficient evidence to the contrary, a presumption by the system that creditable compensation was paid to enhance the memberâs benefits may be reversed. (d) âCreditable compensationâ does not mean and shall not include: (1) Remuneration that is not paid in cash or is not paid to all persons who are in the same class of employees. (2) Remuneration that is paid for service that is not creditable service pursuant to Section 22119.5 or 22119.6. (3) Remuneration that is paid in addition to salary or wages if it is not paid to all persons in the same class of employees in the same dollar amount, the same percentage of salary or wages, or the same percentage of the amount being distributed pursuant to paragraph (2) of subdivision (a). (4) Remuneration that is paid in exchange for the relinquishment of unused accumulated leave. (5) Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement plan, or insurance program; and for contributions to a plan that meets the requirements of Section 125, 401(a), 401(k), 403(b), 457(b), or 457(f) of Title 26 of the United States Code when the cost is covered by an employer and is not deducted from the memberâs salary. (6) Fringe benefits provided by an employer. (7) Expenses paid or reimbursed by an employer. (8) Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a member as compensatory damages or as a compromise settlement. (9) Any other payments the board determines not to be âcreditable compensation.â (e) An employer or individual who knowingly or willfully reports compensation in a manner inconsistent with subdivision (a), (b), or (d) may be subject to prosecution for fraud, theft, or embezzlement in accordance with the Penal Code. The system may establish procedures to ensure that compensation reported by an employer is in compliance with this section. (f) For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees w
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