(c)

1. (1) Regardless of any provision in a state statute, rule, or regulation to the contrary, remuneration, salary, or other compensation that exceeds the limitations set forth provided in the Internal Revenue Code of 1986, 26 U.S.C. § 401(a)(17), as it existed on January 1, 2011, shall not be used for the purposes of calculating the final average salary on which benefits available under the system are based.
2. (2) The limitation on remuneration, salary, or compensation for an eligible employee shall not be less than the amount that was allowed to be considered by the system as in effect on July 1, 1993.

(d)

1. (1) A salary earned by a member before the member’s death and paid after the member’s death is subject to deductions by the system and the member’s covered employer shall report the member’s total salary and days of service in the covered employer’s quarterly report.

2. (2) Gratuitous payments made by a covered employer to a member after the death of the member shall not be:

   1. (A) Considered the salary of the member;
   2. (B) Subject to contribution requirements; and
   3. (C) Included in the covered employer’s quarterly report to the system.

(e) The system shall not consider remuneration, salary, or compensation paid by a covered employer to a member as a salary earned by the member if the:

1. (1) Remuneration, salary, or compensation is paid as an incentive payment, bonus, separation payment, additional salary, or special payment in consideration for the member’s agreement to retire, terminate employment, or not renew a contract with the covered employer;
2. (2) Offer described in subdivision (d)(1) of this section is extended by the covered employer to two (2) or more members;
3. (3) Remuneration, salary, or compensation is not offered as an additional salary or payment for the purchase of service credit that is part of a separation agreement resulting from the resolution of a claim of wrongful termination;

4. (4) Remuneration, salary, or compensation is not payment for accumulated, unused sick leave that:

   1. (A) Accrued in the years immediately preceding the member’s termination of covered employment; and
   2. (B) Were in excess of the number of sick days that the covered employer allowed the member to carry forward;
5. (5) Covered employer offers a voluntary early retirement incentive plan, staff reduction plan, or buyout plan that would require the member as a participant of the plan to retire or terminate his or her employment with the covered employer; and
6. (6) Member voluntarily participates in the plan in exchange for the remuneration, salary, or compensation offered by the covered employer.

(f)

1. (1) A covered employer shall not withhold a member’s contributions or pay employer contributions from a remuneration, salary, or compensation paid to a member if the remuneration, salary, or compensation is subject to a salary limitation as provided by this subpart.
2. (2) A covered employer that offers an early retirement plan, separation, plan, or contract nonrenewal plan and intends to pay remuneration, salary, or compensation that is subject to a salary limitation as provided by this subpart shall notify the system before making a payment under the plan.

(g)

1. (1) At the request of a covered employer, the system shall:

   1. (A) Review a potential plan or payment that may be subject to a salary limitation as provided by this subpart; and
   2. (B) Provide written guidance to the covered employer concerning the applicability of the salary limitation to the plan or payment.
2. (2) The system’s written determination on the applicability of a salary limitation to a plan or payment shall be treated as a staff determination letter, which may be appealed by the covered employer using the procedures in 24 CAR § 10-1001 et seq.
3. (3) The law, rules, and policies applicable to the system shall be controlling if a conflict exists between the system’s calculation of final average salary and a covered employer’s laws, rules, or policies concerning the compensation of final average salary.