California Education Code § 22119.3

(a) “Creditable compensation” for members who are subject to the California Public Employees’ Pension Reform Act of 2013 means the following remuneration that is paid in cash by an employer for performing creditable service in that position each pay period the creditable service is performed: (1) Salary or wages. (2) Remuneration that is paid in addition to salary or wages, only if 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 be paid to all persons in the same class of employees in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule or employment agreement, and 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 (c). (2) Member contributions that are picked up by an employer pursuant to Section 22903 or 22904. (3) Amounts that are deducted from a member’s 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) Notwithstanding paragraphs (6) and (8) of subdivision (c) of Section 7522.34 of the Government Code, remuneration that is paid for creditable service that exceeds one year in a school year. (c) “Creditable compensation” 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 not paid each pay period in which creditable service is performed for that position. (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. (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) Creditable compensation determined by the system to have been paid to enhance a member’s benefit. (10) Compensation paid to the member in lieu of benefits provided to the member by the employer or paid directly by the employer to a third party other than the system for the benefit of the member. (11) Any one-time or ad hoc payments made to a member. (12) Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform. (13) Any bonus paid in addition to compensation described in subdivision (a). (14) Any other payments the board determines not to be “creditable compensation.” (d) (1) Except for purposes of calculating credited service in the Defined Benefit Program and for reporting annualized pay rate on or after January 1, 2013, creditable compensation in any fiscal year shall not exceed: (A) One hundred twenty percent of the “contribution and benefit base,” as determined under Section 430(b) of the Social Security Act (42 U.S.C. Sec. 430(b)), on January 1, 2013, for a member whose service is not included in the federal system. (B) One hundre

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