Until June 30,1967, each member shall pay into the fund six percent of his monthly salary up to $400 a month. After June 30, 1967, each member shall contribute six percent of his monthly salary without any such maximum limitation. Effective January 1, 1987, a city may provide that contributions made by a member shall be before-tax, as permitted by section 414(h)(2) of the Internal Revenue Code. Each member shall continue to make such contributions until such time as such member retires or until he has contributed to the fund for a period of thirty-five years, that is, has thirty-five years of "earned service credit."
For prior service, each participating employee, in the employ of the city on the effective date of the fund, shall be credited, as of such date, with a prior service credit equal to the period or periods of service that the member has rendered to the city prior to the effective date of the fund. Any employee who is in the employ of the city on the effective date of the fund and who becomes a member of the fund shall be entitled to prior service credit even though such prior service was not continuous. Any individual who is not in the employ of the city on the effective date of the fund but who has been employed by the city in the past shall be entitled to prior service credit if he returns to the service of the city within two years from the date of the termination of his service and becomes a member of the fund within such two-year period.
Effective January 1, 1987, a city may provide that members who have been honorably discharged from the military shall receive up to two years prior service credit for military service prior to their employment with the city.
A member upon separation from the service shall be entitled to withdraw his contributions without interest in lieu of any benefits to which he may be entitled. A city may provide that contributions are credited with interest at the rate of six percent compounded annually from January 1, 1987. If such employee returns to the service of the city within two years and becomes a member of the fund, he shall be considered as a new employee and shall have forfeited all prior service credits unless he shall repay to the fund in cash at the time of reemployment the amount of money which he has withdrawn plus four percent interest compounded annually on said amount during the time he was separated from the service, but effective January 1, 1987, a city may require six percent interest. If, however, the break in service of such member is more than two years, he shall not be entitled to any prior service credit nor shall he be entitled to redeposit withdrawals but he shall reenter the fund as a new member.