This bill modifies the definition of earnable compensation for certain group II retirement system members who did not attain vested status prior to January 1, 2012. It expands the definition to include overtime pay and other forms of compensation such as cost of living bonuses, longevity pay, and military differential pay. However, it excludes certain forms of compensation such as incentives to encourage retirement, severance pay, and pay for unused sick or vacation time. The bill also sets limits on earnable compensation during the highest 5 years of creditable service and in the final 12 months of employment. The bill takes effect on July 1, 2024.

The bill also adds a new section that specifies the definition of earnable compensation for group II members who have not attained vested status prior to January 1, 2012. It includes similar provisions as the previous section, including the inclusion of overtime pay and other forms of compensation, and the exclusion of certain forms of compensation. It also sets limits on earnable compensation during the highest 5 years of creditable service and in the final 12 months of employment. The bill specifies that the annual compensation limit for members of governmental defined benefit pension plans under section 401(a)(17) of the United States Internal Revenue Code of 1986, as amended, shall apply to earnable compensation for all permanent firemen and permanent policemen who first become eligible for membership in the system on or after July 1, 1996.