As used in sections 169.600 to 169.710, unless the context clearly requires otherwise, the following words and phrases mean:

(1) “Accumulated contributions”, the sum of the annual contributions a member has made to the retirement system through deductions from the member’s salary, plus interest compounded annually on each year’s contributions from the end of the school year during which such contributions were made;

(2) “Average compensation”, as used in subdivision (3) of subsection 1 of section 169.670, shall be the total compensation paid to a member for any ten consecutive years of creditable service, or for the entire period of creditable service if less than ten years, prior to July 1, 1973, divided by one hundred twenty or by the number of months in the member’s period of creditable service if less than ten years; provided, that in determining the total compensation, any annual compensation entering into the total shall not be less than one thousand two hundred dollars and shall not exceed ten thousand dollars;

(3) “Board”, the board of trustees provided for in section 169.020;

(4) “Creditable service”, prior service or membership service or the sum of the two if the member has both to the member’s credit;

(5) “Employee”, any person regularly employed by a public school district, community college district or by the board of trustees, as defined in sections 169.600 to 169.710, who devotes at least twenty hours per week to such employment in a position which is not covered by the public school retirement system of Missouri; provided, however, that no person shall be required to contribute to, or shall receive benefits from both the retirement system herein established and the public school retirement system of Missouri for the same services;

(6) “Employer”, the district or other employer that makes payment directly to the employee for the employee’s services;

(7) “Final average salary”, the total compensation paid to a member for any three consecutive years of creditable service divided by thirty-six; provided, that in determining the total compensation, any annual compensation less than one thousand two hundred dollars shall be regarded as one thousand two hundred dollars and an annual compensation for services prior to July 1, 1973, in excess of ten thousand dollars shall be regarded as ten thousand dollars; and provided, that the board may set a maximum percentage of increase in annual compensation from one year to the next in the final average salary period;

(8) “Community college district”, any public community college district organized and operated pursuant to the provisions of sections 178.770 to 178.890 which enters into an agreement with the board of trustees of the retirement system to include its eligible employees in the system immediately upon the effective date of the agreement;

(9) “Member”, a person who holds membership in the retirement system;

(10) “Membership service”, service rendered by a member of the system after the system becomes operative;

(11) “Prior service”, service rendered by a member of the retirement system before the system becomes operative and may include service as a teacher for which credit has not been claimed from the public school retirement system of Missouri;

(12) “Public school district” or “district”, any duly constituted public school district under the authority and supervision of a duly elected district or city or town board of directors or board of education, except those school districts defined in sections 169.270 and 169.410;

(13) “Retirement allowance”, a monthly payment for life, during retirement;

(14) “Retirement system” or “system”, the public education employee retirement system of Missouri created by sections 169.600 to 169.710;

(15) “Salary”, “salary rate” or “compensation” shall mean the regular remuneration which is earned by a member as an employee of a district, but not including employer-paid fringe benefits except the value of employer-paid medical benefits (including dental and vision) for members, and not including employer-paid medical benefits (including dental and vision) for anyone other than the member, employer contributions to a deferred compensation plan, consideration for agreeing to terminate employment or other nonrecurring or unusual payments that are not a part of regular remuneration. The board by its rules may further define salary, salary rate and compensation in a manner consistent with this definition and with sections 169.600 to 169.715;

(16) “School year”, the year from July first of one year to June thirtieth of the next year, inclusive, which shall also be the fiscal year of the system.