Sec. 1.04. DEFINITIONS. In this Act:

(1) "Accumulated contributions" means a member's aggregate contributions made to the pension fund, including interest, if any, as determined by the board of trustees.

(1-a) "Actuarial experience study" has the meaning assigned by Section 802.1014, Government Code.

(1-b) "Actuarially determined contribution rate" means the contribution rate, expressed as a percentage of payroll or compensation, actuarially determined necessary to:

(A) fund the normal cost of the pension fund, the costs of administering the fund, and the unfunded actuarial amortization amount of the fund for the current plan year; and

(B) maintain a closed amortization period that does not exceed 30 years.

(2) "Average monthly compensation" means the result obtained by dividing the total compensation paid to a member during a computation period by the product of the number of years in the computation period multiplied by 12. The computation period is the last 60 consecutive completed calendar months of employment with the municipality or, if the member is employed by the municipality for fewer than 60 calendar months, the computation period is all completed months of employment with the municipality.

(3) "Board of trustees" or "board" means the board of trustees of the police pension fund.

(4) "Compensation" means the total cash remuneration paid to a member for personal services rendered to the municipality as a police officer, including longevity pay, overtime pay, deferred compensation, workers' compensation, payments for unused vacation or unused sick leave, and picked-up contributions paid by the municipality to the fund.

(5) "Disability" means the existence of a physical or mental condition that in the judgment of the board totally and permanently prevents the member from engaging in any work for pay for the municipality, for any other employer, or in the member's own employment or business. A disability that exists for a period of six months is presumed to be permanent.

(6) "Member" means a properly appointed and enrolled police officer of a municipality that has adopted this Act who is a contributing member of the pension fund.

(6-a) "Normal cost" means the actuarially determined amount necessary to fully fund accrued pension benefits under the pension fund allocated to the current plan year.

(7) "Pension fund" or "fund" means the police pension fund created by this Act.

(8) "Plan year" means the 12-month period beginning January 1 and ending on the following December 31.

(9) "Trustee" means a member of the board of trustees.

(10) "Unfunded actuarial amortization amount" means the actuarially determined amount required to pay off the fund's unfunded actuarial accrued liability layers over a closed 30-year amortization period. The initial layer is equal to the unfunded actuarial accrued liability of the fund in the plan year beginning January 1, 2019. For each subsequent plan year, the unfunded actuarial accrued liability layer is equal to the unanticipated change in the unfunded actuarial accrued liability of the fund in that plan year over the expected unfunded actuarial accrued liability included in the preceding plan year's actuarial valuation.