Education Code section 22115
(a)
“Compensation earnable” means the sum of the following:(1)
The average annualized pay rate, which shall be determined as the quotient obtained when salary, as described in Section 22119.3, earned in a school year is divided by the service credited for that salary pursuant to paragraph (1) of subdivision (c) of Section 22701. The quotient shall not exceed the member’s highest annualized pay rate for that school year.(2)
Special pay, as described in Section 22119.3, for the same school year referenced in paragraph (1).(b)
If a member earns salary at multiple annualized pay rates during a school year and service credited at the highest annualized pay rate is at least 0.900 of a year, compensation earnable shall be determined as if all salary for that year had been earned at the highest annualized pay rate.(c)
Compensation earnable excludes all supplemental pay and any creditable compensation for which contributions are credited by the system to the Defined Benefit Supplement Program.(d)
Compensation earnable shall not exceed the limits described in Section 22317.5.(e)
This definition of “compensation earnable” reflects sound principles that support the integrity of the retirement fund. Those principles include, but are not limited to, consistent treatment of compensation earnable throughout a member’s career, consistent treatment of compensation earnable among an entire class of employees, consistent treatment of compensation earnable for the position, preventing adverse selection, and excluding from compensation earnable remuneration that is paid to enhance a member’s benefits. This definition is also consistent with the definition of “pensionable compensation” under Section 7522.34 of the Government Code for members who are subject to the California Public Employees’ Pension Reform Act of 2013.(f)
A presumption by the system that creditable compensation was paid or reported to enhance the member’s 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 member’s benefits may be reversed.(g)
(1)The board shall determine a date based on when the system has the capacity to implement the changes made by the act that added this subdivision. The date determined by the board shall be posted on the internet website of the system no later than July 1, 2027.(2)
This section shall become operative on the date determined by the board pursuant to paragraph (1).
Source:
Section 22115, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=EDC§ionNum=22115. (accessed May 9, 2025).