Regular Compensation
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Regular compensation is the amount of earnings upon which a member pays retirement contributions.
Regular compensation will be used in determining a member’s final average salary, which is one of the factors used in calculating a retirement allowance. Compensation must comply with statutory and regulatory requirements in order to be pensionable.
Regular compensation generally includes:
- The annual rate of compensation in a member’s salary schedule
- Educational incentives
- Longevity payments made for length of service
- Premiums for holidays and shift
- Payments for rendering instructional training
- Hazmat pay for police and fire
- On call or standby pay
differentials for police and fire
Regular compensation generally excludes:
- Amounts paid for hours worked beyond the member’s normal work schedule (i.e., overtime)
- Amounts paid as bonuses other than cost-of-living bonuses
- Payments which will not recur, and payments which will recur for only a limited or definite term (i.e., salary augmentation plan)
- Amounts paid for unused vacation, sick leave, or other leave
- Severance pay
- Amounts paid as early retirement incentives
- Any payments made as a result of giving notice of retirement
- Amounts paid for housing and lodging
- Amounts paid for travel
- Amounts paid for clothing, uniform, tool allowances
- Amounts paid for annuities
- Amounts paid for expense payments
- Amounts paid for automobile usage
- Amounts paid for insurance premiums or for not participating in the employer’s health insurance plan