(a) The following incentive payments will not be included in earnable compensation in determining retirement benefits under Chapters 2 and 3 of Title 47:

(1) Payments under an incentive awards program;

(2) Recruitment payments under an incentive compensation plan; or

(3) Payments for learning new, critically needed employment skills.

However, these incentive payments will be included as salary in the pay period granted and will be subject to employee withholding taxes in that pay period. If state or federal law otherwise requires an incentive payment to be included in salary for computing a benefit, the incentive will be deemed to have been paid, for such purpose only, annualized in equal installments prospectively over the following 12 months.

(b) The following incentive payments under employee incentive compensation plans will be included in calculating earnable compensation in determining retirement benefits under Chapters 2 and 3 of Title 47:

(1) Lump sum payments for surpassing performance expectations under subparagraph (c)(1)(C) of Code Section 45-21-2; and

(2) Goal based or incentive pay under subparagraph (c)(1)(D) of Code Section 45-21-2.

When an incentive payment will be included in salary for computing retirement benefits, the incentive will be deemed to have been paid, for such purpose only, annualized in equal installments prospectively over the following 12 months. These incentive payments will be included as salary in the pay period granted and will be subject to employee withholding taxes in that pay period. If state or federal law otherwise requires an incentive payment to be included in salary for computing a benefit, the incentive will be deemed to have been paid, for such purpose only, annualized in equal installments prospectively over the following 12 months.