(a) “Salary” means remuneration paid in cash by an employer to a participant for creditable service performed in that position subject to coverage under the Cash Balance Benefit Program. Salary shall include:
(1) Money paid in accordance with a publicly available written contractual agreement, including, but not limited to, a salary schedule, based on years of training and years of experience as specified in Section 45028 for creditable service performed.
(2) For participants not paid according to a salary schedule, money paid for creditable service performed in accordance with a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement.
(3) Money paid for the participant’s absence from performance of creditable service as approved by an employer, except as provided in paragraph (5) of subdivision (b).
(4) Employee contributions picked up by an employer pursuant to Section 26502.
(5) Amounts deducted by an employer from the participant’s salary, including, but not limited to, deductions for participation in a deferred compensation plan; deductions for the purchase of an annuity contract, tax-deferred retirement plan, or other insurance program; and deductions for participation in 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.
(6) Money paid by an employer in addition to salary paid under paragraph (1) or (2) if paid to all employees in a class in the same dollar amount, the same percentage of salary, or the same percentage of the amount being distributed.
(7) Any other payments the board determines by plan amendment to be “salary.”
(b) “Salary” does not mean and shall not include:
(1) Money paid for service that is not creditable service.
(2) Money paid by an employer in addition to salary paid under paragraph (1) or (2) if not paid to all employees in a class in the same dollar amount, the same percentage of salary, or the same percentage of the amount being distributed.
(3) Fringe benefits provided by an employer.
(4) Expenses paid or reimbursed by an employer.
(5) Money paid in exchange for the relinquishment of unused accumulated leave.
(6) Severance pay, including lump-sum and installment payments, or money paid in excess of salary or wages to a participant as compensatory damages or as a compromise settlement.
(7) Payments, including, but not limited to, those for participation in a deferred compensation plan; to purchase an annuity contract, tax-deferred retirement program, or other insurance program; and for participation in 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 that are purchased by an employer for a participant.
(8) Any payments determined by the system to have been made by an employer to enhance a participant’s benefits.
(9) Any other payments the board determines by plan amendment not to be “salary.”
(c) Any employer or person who knowingly or willfully reports salary in a manner inconsistent with the provisions of subdivisions (a) or (b) may be subject to prosecution for fraud, theft, or embezzlement in accordance with provisions of the Penal Code. The system may establish procedures to ensure that salary reported by an employer is in compliance with this section.
(d) For purposes of this section, remuneration shall be considered paid if distributed to any person in the same class of employees who meets the qualifications or requirements specified in a publicly available written contractual agreement, including, but not limited to, a collective bargaining agreement or an employment agreement, as a condition of receiving the remuneration.
(e) This section shall be deemed to have become operative on July 1, 1996.
(f) This section shall not apply to a participant subject to the California Public Employees’ Pension Reform Act of 2013.
(Amended by Stats. 2013, Ch. 559, Sec. 36. (AB 1381) Effective January 1, 2014.)
Last modified: October 25, 2018