1. (a) This section applies to the calculation of the average of the annual compensation under section 3 of this chapter for members who retire after December 31, 2027.

2. (b) For purposes of this section, "compensation received in contemplation of retirement" means compensation that:

   1. (1) a member received:

      1. (A) during the member's last year of service; and
      2. (B) after the member's last year of service; and
   2. (2) is greater than one hundred twenty percent (120%) of the compensation the member received during the year immediately before the member's last year of service.

3. (c) For a member who:

   1. (1) retires after December 31, 2027; and

   2. (2) served in a covered position during the entire year before the member's last year of service;

      compensation received in contemplation of retirement is excluded from the average of the annual compensation.

4. (d) For purposes of this section, a year must begin on January 1 or July 1 on the same basis as the average of the annual compensation.

As added by P.L.104-2026, SEC.10.