(a) “Creditable compensation” means the following remuneration that is paid in cash by an employer:

1. (1) “Base pay,” which shall be used exclusively to determine compensation earnable and shall meet all the following criteria:

   1. (A) Is either of the following:

      1. (i) Salary established pursuant to a publicly available pay schedule.
      2. (ii) Special pay established pursuant to a publicly available agreement.
   2. (B) Is paid for performing creditable service up to the full-time equivalent.
   3. (C) Is paid to all persons in the same class of employees who meet the requirements specified in a publicly available pay schedule or publicly available agreement provided that those requirements are permitted by the board in accordance with regulations.
   4. (D) Is not paid a limited number of times.
   5. (E) Is not a bonus for members who are subject to the California Public Employees’ Pension Reform Act of 2013.
2. (2) “Supplemental pay” is any compensation that does not meet the criteria for base pay and is not otherwise excluded from this definition of creditable compensation pursuant to subdivision (c).

(b) Except as otherwise prohibited pursuant to subdivision (c), “creditable compensation” shall include:

1. (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. (2) Member contributions that are picked up by an employer pursuant to Section 22903 or 22904.
3. (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. (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. (1) Remuneration that is not paid in cash.
2. (2) Remuneration that is paid in exchange for the relinquishment of unused accumulated leave.
3. (3) 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.
4. (4) Fringe benefits provided by an employer.
5. (5) Expenses paid or reimbursed by an employer.
6. (6) Severance pay, including lump-sum and installment payments.
7. (7) Compensation paid in excess of base pay to a member as compensatory damages or as a compromise settlement.
8. (8) Creditable compensation determined by the system to have been paid to enhance a member’s benefit.
9. (9) 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.
10. (10) Any employer-provided allowance, reimbursement, or payment, including, but not limited to, one made for housing, vehicle, or uniform.
11. (11) Any other payments the board determines not to be “creditable compensation.”

(g)

1. (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. (2) This section shall become operative on the date determined by the board pursuant to paragraph (1).