(2) Notwithstanding the definition of "final average salary" provided by ORS 238.005, for the purpose of calculating the retirement allowance of a person who establishes membership in the system on or after January 1, 1996, as described in ORS 238.430, and who is not employed by a local government as defined in ORS 174.116, the term "final average salary" means whichever of the following is greater:
(a) The average salary per calendar year paid to a public employee who is an active member of the system in three of the calendar years of membership before the effective date of retirement of the employee, in which three years the employee was paid the highest salary. The three calendar years in which the employee was paid the largest total salary may include calendar years in which the employee was employed for less than a full calendar year. If the number of calendar years of active membership before the effective date of retirement of the employee is three or less, the final average salary for the employee is the average salary per calendar year paid to the public employee in all of those years, without regard to whether the employee was employed for full calendar years.
(b) One-third of the total salary paid to a public employee who is an active member of the system in the last 36 calendar months of membership before the effective date of retirement of the employee.
(3) For the purposes of calculating the final average salary of a member under subsection (2) of this section, the Public Employees Retirement Board shall:
(a) Include any salary paid in or for the calendar month of separation from employment;
(b) Exclude any salary for any pay period before the first full pay period that is included in the three calendar years of membership under subsection (2)(a) of this section if the three calendar years were consecutive; and
(c) Exclude any salary for any pay period before the first full pay period that is included in the last 36 calendar months of membership under subsection (2)(b) of this section.
(4) Notwithstanding the definition of "final average salary" provided by ORS 238.005, for the purpose of calculating the retirement allowance of a person who establishes membership in the system on or after January 1, 1996, as described in ORS 238.430, and who is employed by a local government as defined in ORS 174.116, the term "final average salary" means whichever of the following is greater:
(a) The average salary per calendar year earned by a public employee who is an active member of the system in three of the calendar years of membership before the effective date of retirement of the employee, in which three years the employee earned the highest salary. The three calendar years in which the employee earned the largest total salary may include calendar years in which the employee was employed for less than a full calendar year. If the number of calendar years of active membership before the effective date of retirement of the employee is three or less, the final average salary for the employee is the average salary per calendar year earned by the public employee in all of those years, without regard to whether the employee was employed for full calendar years.
(b) One-third of the total salary earned by a public employee who is an active member of the system in the last 36 calendar months of membership before the effective date of retirement of the employee.
(5) The normal retirement age is 60 years of age for a member who establishes membership in the system on or after January 1, 1996, as described in ORS 238.430, and who retires as other than a police officer or firefighter.
(6) ORS 238.255 does not apply to any person who establishes membership in the Public Employees Retirement System on or after January 1, 1996, as described in ORS 238.430.
(7) Except as provided in this section, all provisions of this chapter are applicable to persons who establish membership in the system on or after January 1, 1996, as described in ORS 238.430. [1995 c.654 §3; 1999 c.407 §4; 2005 c.808 §33; 2009 c.103 §1]