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(1)
(a) "Compensation" means the total amount of payments which are currently includable in gross income made by a participating employer to a member of this system for services rendered to the participating employer.
(b) "Compensation" includes:
(i) performance-based bonuses;
(ii) cost-of-living adjustments;
(iii) payments subject to Social Security deductions;
(iv) any payments in excess of the maximum amount subject to deduction under Social Security law; and
(v) amounts which the member authorizes to be deducted or reduced for salary deferral or other benefits authorized by federal law.
(c) "Compensation" for purposes of this chapter may not exceed the amount allowed under Internal Revenue Code Section 401(a)(17).
(d) "Compensation" does not include:
(i) the monetary value of remuneration paid in kind, such as a residence or use of equipment;
(ii) all contributions made by a participating employer under a system or plan for the benefit of a member or participant;
(iii) salary paid to a temporary or exempt employee;
(iv) payments upon termination or any other special payments including early retirement inducements; or
(v) uniform, travel, or similar payments.
(2) "Final average salary" means the amount calculated by averaging the highest two years of annual compensation preceding retirement, subject to Subsections (2)(a), (b), and (c).
(a) Except as provided in Subsection (2)(b), the percentage increase in annual compensation in any one of the years used may not exceed the previous year's compensation by more than 10% plus a cost-of-living adjustment equal to the decrease in the purchasing power of the dollar during the previous year, as measured by a United States Bureau of Labor Statistics Consumer Price Index average as determined by the board.
(b) In cases where the participating employer provides acceptable documentation to the board, the limitation in Subsection (2)(a) may be exceeded if:
(i) the member has transferred from another agency; or
(ii) the member has been promoted to a new position.
(c) The annual compensation used to calculate final average salary shall be based on the state's fiscal year.
(3) "Judge" means a judge or justice of the courts of record as enumerated in Section 78A-1-101.
(4) "Participating employer" means the state.
(5) "System" means the Judges' Noncontributory Retirement System created under this chapter.
(6) "Years of service credit" means the number of periods, each to consist of 12 full months or as determined by the board, whether consecutive or not, during which a judge was employed by a participating employer.