(a) An employee is eligible for an occupational disability benefit if employment is terminated because of a total and apparently permanent occupational disability, as defined in AS 39.35.680, before the employee's normal retirement date.

(b) The occupational disability benefits accrue beginning the first day of the month following termination of employment as a result of the disability and are payable the last day of the month. If a final determination granting the benefit is not made in time to pay the benefit when due, a retroactive payment shall be made to cover the period of deferment. The last payment shall be for the first month in which the disabled employee

(1) dies;

(2) recovers from disability;

(3) fails to meet the requirements under (g) of this section or under AS 39.35.415; or

(4) reaches normal retirement age.

(c) If the disabled employee becomes ineligible to receive occupational disability benefits before the normal retirement date, the disabled employee shall then be entitled to receive an early retirement benefit if the employee would have been eligible for the benefit had employment continued during the period of disability. The period of disability constitutes credited service.

(d) The monthly amount of an occupational disability benefit is 40 percent of the disabled employee's gross monthly compensation at the time of termination due to disability.

(e) [Repealed, § 12 ch 123 SLA 1976.]

(f) An employee is not entitled to an occupational disability benefit unless the employee files an application for it with the administrator within 90 days of the date of terminating employment. If the employee is unable to meet a filing requirement of this subsection, it may be waived by the commissioner if there are extraordinary circumstances that resulted in the employee's inability to meet the filing requirement.

(g) A disabled employee receiving an occupational disability benefit shall undergo a medical examination as often as the administrator considers advisable but not more frequently than once each year. The administrator shall determine the place of the examination and engage the physician or physicians. If, in the judgment of the administrator, the examination indicates that the retired employee is no longer incapacitated because of a total and apparently permanent occupational disability, the administrator may not issue further disability benefits to the employee.

(h) A disabled employee's occupational disability benefit terminates when the disabled employee first attains eligibility for normal retirement. At that time, the employee's retirement benefit shall be calculated under the provisions of AS 39.35.370(c).

(i) Notwithstanding (h) of this section, at the time a peace officer or firefighter receiving occupational disability benefits under this section first attains eligibility for normal retirement, the employee shall irrevocably elect to receive retirement benefits in the amount calculated as the

(1) monthly occupational disability benefit calculated under (d) of this section; or

(2) employee's retirement benefit calculated under the provisions of AS 39.35.370(c).

(j) Notwithstanding (b)(3) of this section, a peace officer or firefighter who retires under (i) of this section is not subject to the requirements of (g) of this section or AS 39.35.415 during retirement.