§ 501. Definitions. The following words and phrases used in this
article shall have the following meanings unless a different meaning is
plainly required by the context: 1. "Retirement system" shall mean the
New York state teachers' retirement system provided for in section five
hundred two of this article.

2. "Retirement board" shall mean the retirement board provided by
section five hundred four of this article.

3. "Employer" shall mean the state of New York, the city, the village,
school district board or trustee, or other agency of and within the
state by which a teacher is paid.

4. "Teacher" shall mean any regular teacher, special teacher,
including any school librarian or physical training teacher, principal,
vice-principal, supervisor, supervisory principal, director,
superintendent, city superintendent, assistant city superintendent,
district superintendent and other member of the teaching or professional
staff of any class, public school, vocational school, truant reformatory
school or parental school, and of any or all classes of schools within
the state of New York, including schools on the Indian reservation,
conducted under the order and superintendence of and wholly or partly at
the expense of the New York state education department or of a duly
elected board of education, board of school directors or board of
trustees of the state or of any city or school district thereof,
provided that no person shall be deemed a teacher within the meaning of
this article who is not so employed for full time outside vacation
periods. The word, "teacher," shall also include any person employed in
the state education department who at the time he entered such
employment, or within one year prior thereto, was a teacher within the
foregoing definition, or who was engaged in such department in the
performance of duties pertaining to instructional services prior to
September first, nineteen hundred eighty-six or who provides
instructional services at the New York state school for the blind or the
New York state school for the deaf, but shall not include a person who
is a teacher within the foregoing definition, and who elects to become a
member of the New York state employees' retirement system pursuant to
paragraph five of subdivision c of section forty of the retirement and
social security law upon his entry, on or after April first, nineteen
hundred fifty, into his employment as such a teacher in a state-operated
institution or community college under the jurisdiction of the board of
trustees of the state university, or who is a teacher within the
foregoing definition, and who elects to become a member of the New York
city employees' retirement system, upon his entry, on or after April
first, nineteen hundred fifty-six, into his employment as such a teacher
in a community college operated by the city of New York, or who is a
teacher within the foregoing definition, and who elects the optional
retirement program established either by article eight-b or by article
three, part V of this chapter. In all cases of doubt, the retirement
board shall determine whether any person is a teacher as defined in this
article.

5. "Present teacher" shall mean any teacher who was a teacher on or
before the first day of August, nineteen hundred twenty-one, whose
membership in the retirement system created by this article has been
continuous and

a. who became a member of the retirement system created by this act on
or before the first day of May, nineteen hundred twenty-four, provided
that any such teacher becoming a member after the establishment of the
system pay to the system on entrance the amount he would have
contributed had he become a member as of the date of establishment; or

b. who was a member of a local district pension system on or before
the first day of August, nineteen hundred twenty-one, who continued
thereafter to be a member until he, with the membership of such local
district pension system, became a member of the retirement system
created by this article.

6. "New entrant" shall mean any teacher who is a member of the
retirement system except a present teacher.

7. "Contributor" shall mean any member of the retirement system who
has an account in the annuity savings fund as provided by this article.

8. "Beneficiary" shall mean any person in receipt of a retirement
allowance or other benefit as provided by this article.

9. "Regular Interest" a. For the purpose of crediting interest to
individual accounts in the annuity savings fund, regular interest shall
mean interest at five per centum per annum, compounded annually.

b. For the purpose of the actuarial valuations specified in
subdivision two of section five hundred seventeen of this article,
regular interest shall mean the valuation rate of interest recommended
by the system's actuary and approved by the retirement board from time
to time.

c. Notwithstanding any other provision of this article, the annuity
values, option factors and reserves to be used to determine the amount
of any benefit payable under the provisions of this article, except the
benefit payable under paragraph three of subdivision b of section five
hundred twelve of this article, provided that the right to the initial
payment of the benefit accrues during the period that this subdivision
is in effect, shall be based upon an assumed interest rate of four per
centum per annum compounded annually. In the case of any person retiring
on or after January first, nineteen hundred eighty-six, the assumed
interest rate shall be such rate as recommended by the system's actuary
and approved by the retirement board from time to time not to exceed
seven per centum per annum compounded annually, provided, however, that
the authority to use a rate in excess of four per centum per annum
compounded annually shall only become effective if the courts have
already finally determined, as to all members, beneficiaries and
retirees of the retirement system, the proper application of the
decision of the United States supreme court in the case of Arizona
Governing Committee for Tax Deferred Annuities and Deferred Compensation
Plans v. Norris, 103 S.Ct. 3492 (1983). The exercise of this authority
with respect to any class of annuitants, shall be an authority which is
vested exclusively in the retirement board and nothing herein shall be
construed as requiring a retroactive application of this authority at
the time when such authority becomes available to the retirement board
as set forth above.

10. "Accumulated contributions" shall mean the sum of all the amounts
deducted from the compensation of a contributor, and credited to his
individual account in the annuity savings fund together with regular
interest thereon. The interest on any contributions made after July
first, nineteen hundred fifty-seven and prior to the date of receipt of
them by the board shall be added to the accumulated contributions of the
member in accordance with regulations of the retirement board.

11. a. "Final average salary" shall mean the average annual
compensation earnable as a teacher during the five years of service
immediately preceding his date of retirement, or it shall mean the
average annual compensation earnable as a teacher during any five
consecutive years of state service, said five years to be selected by
the applicant prior to date of retirement. In the case of a member with
a membership date prior to the seventeenth day of June, nineteen hundred
seventy-one, a contribution by an employer on behalf of such member to a
defined contribution plan qualified under subsection a of section four
hundred one of the Internal Revenue Code of nineteen hundred eighty-six,
as amended and maintained by such employer may be treated as
compensation for the purposes of this paragraph, provided such
contribution would otherwise have been treated as compensation, had it
been paid directly to the member at the time the contribution was made.

b. Notwithstanding anything to the contrary in this article,
commencing July first, nineteen hundred sixty-nine, "Final Average
Salary" shall mean the average regular compensation earned as a teacher
during the three years of actual service immediately preceding his date
of retirement, or any other three years of consecutive service upon
application of the member, exclusive of any lump sum payments for sick
leave, annual leave or any other form of termination pay; provided,
however, if the compensation earned in any twelve months exceeds that of
the previous twelve months by more than twenty percentum, the amount in
excess of twenty percentum shall be excluded in the computation of final
average salary. In the case of persons who last became members on or
after July first, nineteen hundred seventy-three, the provisions of this
paragraph b shall apply only to those retiring from service prior to
July first, nineteen hundred seventy-four.

12. "Annuity" shall mean the annual payments for life derived from
contributions made by contributor as provided in this article. All
annuities shall be paid in equal monthly installments.

13. "Pension" shall mean the annual payments for life derived from
payments made by an employer as provided in this article. All pensions
shall be paid in equal monthly installments.

14. "Retirement allowance" shall mean the pension plus the annuity.

15. "Annuity reserve" shall mean the present value of all payments to
be made on account of any annuity, or benefit in lieu of any annuity,
computed upon the basis of such mortality tables as shall be adopted by
the retirement board with regular interest.

16. "Pension reserve" shall mean the present value of all payments to
be made on account of any pension, or benefit in lieu of any pension,
computed upon the basis of such mortality tables as shall be adopted by
the retirement board with regular interest.

17. "Retirement fund" shall mean the state teachers' retirement fund
for public school teachers of the state of New York as created by
chapter one hundred forty of the laws of nineteen hundred ten, chapter
four hundred forty-nine of the laws of nineteen hundred eleven, chapter
forty-four of the laws of nineteen hundred fourteen, chapter one hundred
three of the laws of nineteen hundred nineteen and chapter one hundred
sixty-one of the laws of nineteen hundred twenty-three.

18. "Local district pension system" shall mean any teachers'
retirement system or other arrangement for the payment of pensions or
annuities to teachers exclusive of the retirement fund, created in any
city or school district of this state prior to the first day of August,
nineteen hundred twenty-one.

19. "Service" shall mean actual teaching or supervision by the teacher
during regular school hours of the day, and shall mean governmental
service in the state of New York in another capacity where the teacher
was a member of the New York state employees retirement system, and
where such service was credited to the teacher in the said New York
state employees retirement system. Leave of absence with pay granted by
the employer may be considered service under regulations prescribed by
the retirement board. In all such leaves of absence the salary actually
received shall be deemed to be the earnable compensation of such teacher
within the meaning of this article, provided, however, that in the case
of a member who dies at any time during the period from July first,
nineteen hundred sixty-four through June thirtieth nineteen hundred
seventy-four, who is entitled to a death benefit in accordance with
paragraph two of subdivision b of section five hundred twelve and who
was on a leave of absence with pay in the last twelve months of service,
then the compensation earnable by such member during the last twelve
months of service while a member shall be the amount of salary such
member would have earned had such member not been on such leave of
absence.