C. Notwithstanding the other provisions of this subsection, |
for the purposes of determining average final compensation, |
"earnable compensation" does not include any increase that |
exceeds the prior year's earnable compensation by more than |
5% or that results in a total increase of more than 10% |
during the 3-year period used in the calculation of average |
final compensation, unless the cost of the additional |
actuarial liability arising from the excess increase is paid |
by the employer as provided in section 17154. In |
calculating the limit on earnable compensation imposed by |
this paragraph, the retirement system shall use the member's |
4th highest year of earnable compensation as the base year |
regardless of when that year occurred. Any payment made |
under paragraph B, subparagraph (1) must be included in |
determining the amount of increase in the year in which the |
payment is made. This paragraph does not apply to excess |
increases resulting from compensation paid prior to July 1, |
1993, from compensation paid in accordance with an |
individual employment contract executed prior to July 1, |
1993 or a collective bargaining agreement executed or |
ratified in its final form by final vote of one party to the |
agreement prior to July 1, 1993 for the initial term of that |
contract or agreement or from other action by the governing |
body of a school administrative unit in effect on July 1, |
1993. This paragraph does not apply to increases in |
compensation of state employees during fiscal year 1993-94 |
and fiscal year 1994-95. In all circumstances in which this |
paragraph does not apply to earnable compensation of state |
employees and teachers, the provisions of this paragraph |
that were in effect prior to June 30, 1993 apply. This |
paragraph does not apply to earnable compensation of |
employees of participating local districts. |