§88-21.5  Compensation.  (a)  For a member who became a member before July 1, 2012:

     (1)  Unless a different meaning is plainly required by context, "compensation" as used in this part means:

          (A)  Normal periodic payments of money for service the right to which accrues on a regular basis in proportion to the service performed;

          (B)  Overtime, differentials, and supplementary payments;

          (C)  Bonuses and lump sum salary supplements;

          (D)  Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended; and

          (E)  Retroactive payments of those purposes and nature authorized in subparagraphs (A) through (D), and certified as compensation pursuant to section 88-64;

     (2)  Bonuses and lump sum salary supplements shall be deemed earned when payable; provided that bonuses or lump sum salary supplements in excess of one-twelfth of compensation for the twelve months before the month in which the bonus or lump sum salary supplement is payable, exclusive of overtime, bonuses, and lump sum salary supplements, shall be deemed earned:

          (A)  During the period agreed-upon by the employer and employee, but in any event over a period of no less than twelve months; or

          (B)  In the absence of an agreement between the employer and the employee, over the twelve months before the date on which the bonus or lump sum salary supplement is payable; and

     (3)  Retroactive payments shall be deemed earned when it would have been earned, as determined by the system pursuant to section 88-64.

     (b)  For a member who becomes a member after June 30, 2012, unless a different meaning is plainly required by context, "compensation" as used in this part:

     (1)  Means:

          (A)  The normal periodic payments of money for service, the right to which accrues on an hourly, daily, monthly, or annual basis;

          (B)  Shortage differentials;

          (C)  Elective salary reduction contributions under sections 125, 403(b), and 457(b) of the Internal Revenue Code of 1986, as amended;

          (D)  Twelve-month differentials for employees of the department of education; and

          (E)  Retroactive payments of those purposes and nature of payments authorized in subparagraphs (A) through (D), and certified as compensation pursuant to section 88-64;

     (2)  Shall not include any other additional or extra payments to an employee or officer, including overtime, supplementary payments, bonuses, lump sum salary supplements, allowances, or differentials, including differentials for stand-by duty, temporary unusual work hazards, compression differentials, or temporary differentials, except for those expressly authorized pursuant to paragraphs (1)(B) through (1)(E); and

     (3)  Retroactive payments shall be deemed earned when it would have been earned, as determined by the system pursuant to section 88-64. [L 2004, c 182, §2; am L 2012, c 152, §1; am L 2023, c 46, §4]

Case Notes

  This section did not undermine employees' retirement system's (ERS) interpretation [of "compensation"]; nothing in the legislative history indicates the legislature intended to alter the content of "compensation" by adding [the definition of "compensation" in this section], and according to ERS administrator, ERS' internal working definition of what was included in compensation remained unchanged.  Rather, this section was added to satisfy the Internal Revenue Code of 1982's requirement that a member's benefit be "definitely determinable".  129 H. 107 (App.), 295 P.3d 977 (2013).