| (1) Notwithstanding the other provisions of this |
| subsection, except as provided in subparagraph 1-A, 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. 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 subparagraph 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 |
| subparagraph 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 subparagraph does not apply to earnable |
| compensation of state employees and teachers, the |
| provisions of this subparagraph that were in effect |
| prior to June 30, 1993 apply. This subparagraph does |
| not apply to earnable compensation of employees of |
| participating local districts. |
