(a) Notwithstanding Section 22134, “final compensation” means the highest average annual compensation earnable, as defined in Section 22115, by a member during any period of 12 consecutive months of service while an active member of the Defined Benefit Program or time during which he or she was not a member but for which the member has received credit under the Defined Benefit Program, except time that was so credited for service performed outside this state prior to July 1, 1944.

(b) For purposes of this section, periods of service separated by breaks in service may be aggregated, if the periods of service are consecutive except for the breaks.

(c) The following shall be considered periods of service for the purpose of determining final compensation:

(1) The full pay period if the member earns creditable compensation within that pay period, but not beyond the benefit effective date except as provided in paragraph (3).

(2) The months of the school year preceding the school term if the member earns creditable compensation during the first pay period of that school term.

(3) The months of the school year following the school term if the member earns creditable compensation during the last pay period of that school term.

(4) Any period that is excluded from the school term if a member earns creditable compensation during the pay periods immediately preceding and immediately following the excluded period.

(d) For purposes of determining the final compensation of a member who is eligible for concurrent retirement as defined in Section 22115.5, the compensation a person could earn for services rendered on a full-time basis under a retirement system with which the member has concurrent membership, as defined in Section 22115.2, shall be considered compensation earnable, provided that both of the following exist:

(1) The compensation under the other system was not earned during the periods of service determined pursuant to subdivision (c) under the Defined Benefit Program.

(2) Retirement for service under the Defined Benefit Program is concurrent with the member’s retirement for service under the other system pursuant to Section 22115.5.

(e) If a member has received service credit for part-time service performed prior to July 1, 1956, the member’s final compensation shall be adjusted for that service in excess of one year by the ratio that part-time service bears to full-time service.

(f) For purposes of calculating a benefit that does not include service credit, final compensation shall be the highest average annual creditable compensation earned by a member during any period of 12 consecutive months of service, excluding compensation for which contributions are credited to the Defined Benefit Supplement Program. Final compensation determined pursuant to this subdivision shall not exceed the amount determined pursuant to subdivision (a).

(g) This section shall apply to the following:

(1) A member who has 25 or more years of credited service, excluding service credited pursuant to the following:

(A) Section 22714.

(B) Section 22715.

(C) Section 22717, except as provided in subdivision (c) of Section 22121.

(D) Section 22826.

(2) A nonmember spouse, if the member had 25 or more years of credited service, as calculated in paragraph (1), on the date the parties separated, as established in the judgment or court order pursuant to Section 22652.

(3) This section shall not apply to a member subject to the California Public Employees’ Pension Reform Act of 2013.

(Amended by Stats. 2018, Ch. 416, Sec. 4. (SB 1165) Effective January 1, 2019.)