(1) The average final compensation of a member who retires or dies before they receive full service credit for the fiscal year, shall be determined by using the greater of:

(a) the equivalent of the final three consecutive years' contracts reported to the system, based on the percentage of the member's final contract reported during their last fiscal year, plus any additional compensation reported during the same period.   For example, if 50% of the member's contract is reported during their final fiscal year, then we would calculate AFC using the compensation reported during the last fiscal year, plus the salary reported the first fiscal year preceding retirement, plus the salary reported the second fiscal year preceding retirement, plus 50% of the salary reported the third fiscal year preceding retirement; or

(b) any 3 full consecutive fiscal years' compensation which yield the highest average.

(2) Only salaries earned under contract on which contributions have been made can be used to determine the average final compensation.