(a) A three-year final average salary is defined as the highest average annual regular salary earned by a member over a period covering three consecutive years of New York State service credit. Regular salary earned shall exclude termination pay and payments which are not part of the salary base and/or are not paid over a period of years; for example, bonuses and one-time-only increments. It shall also exclude any earnings in excess of 120 percent of the earnings for the preceding year of service credit (the preceding two years of service credit for those members with a date of membership on and after July 1, 1973 and before July 1, 1976), after such earnings have been adjusted to exclude the termination pay.

(b) If the member has fewer than three years of service credit, then his or her final average salary shall be computed over the actual period of service.