(a)

1. (1) Under Acts 1985, No. 899, benefits to members retiring on or after June 28, 1985, shall be based on one-half (1/2) of the actual salary of the member based upon the member’s highest salary year during his or her time of service.

2. (2) Such salary shall not include:

   1. (A) Overtime pay;
   2. (B) Payments for unused accrued sick leave or annual leave; or
   3. (C) The cash value of any nonrecurring or unusual remuneration.

(b)

1. (1) For benefits computed on a salary year prior to June 28, 1985, the overtime exclusion does not apply.
2. (2) Beginning March 18, 1985, the minimum monthly pension of a police officer is two hundred fifty dollars ($250) per month (Acts 1985, No. 391), unless the plan is Acts 1993, No. 1197, eligible, at which time it will be a minimum of three hundred fifty dollars ($350) per month.

3. (3) On and after June 28, 1985, the term “salary”, as used for purposes of pension deductions and computation of benefits, means:

   1. (A) Line-item salary;
   2. (B) Education or certificate pay;
   3. (C) Annual and holiday pay; and
   4. (D) Longevity pay.
4. (4) For a pension computed on a salary year prior to June 28, 1985, the local board of trustees shall determine by board regulation what shall constitute “compensation”.
5. (5) On and after June 28, 1985, pension deductions shall not be withheld on overtime pay, or on any other type of pay, which will not be included as “salary” for pension contributions.
6. (6) Local boards of trustees shall not authorize refunds to active members of pension contributions made on overtime pay or other types of pay prior to June 28, 1985.