(a) Required membership.--The following employees of municipal authorities shall be members of the borough retirement system upon a written election as provided in this section:

(1) An employee of a wastewater authority created by a borough and one or more townships under 53 Pa.C.S. Ch. 56 (relating to municipal authorities) that commenced operations after December 1, 2001, who satisfies the requirements of subsection (b), has past service credits under the borough retirement plan and has filed a written election to be a member of the borough retirement system with council and the wastewater authority prior to September 14, 2005.

(2) An employee of a municipal authority created by a borough under 53 Pa.C.S. Ch. 56 that commenced operations after October 4, 2010, who satisfies the requirements of subsection (b), has past service credits under the borough retirement plan and files a written election with the council and the authority to be a member of the borough retirement system within one year of July 16, 2012.

(b) Eligibility criteria.--

(1) In order to qualify for the option under subsection (a), the employee must satisfy both of the following requirements:

(i) Immediately prior to the date of transfer of employment to the authority, be an employee of the borough that, either alone or together with one or more municipalities, established the authority.

(ii) Be an active member of the borough's retirement system on the date that the employee's employment was transferred to the authority.

(2) For an employee who files an election under subsection (a), the affected authority shall:

(i) Deduct from the employee's salary an amount equal to the employee contribution that would have been deducted had the employee continued to be a borough employee and shall pay the deducted amount to the borough's retirement fund.

(ii) Pay to the borough's retirement fund an employer contribution equal to the employer normal cost plus anticipated administrative expenses and amortization payments less general municipal pension system State aid expressed as a percentage of the system's total payroll as calculated by the borough under the act of December 18, 1984 (P.L.1005, No.205), known as the Municipal Pension Plan Funding Standard and Recovery Act, and applied to the payroll of the employee.

(c) State aid calculation.--All employees who elect to be members of the borough retirement system under this section shall be treated as borough employees in determining the borough's annual allocation of general municipal pension system State aid under section 402(e) of the Municipal Pension Plan Funding Standard and Recovery Act, and the annual allocation of general municipal pension system State aid under section 402(e) of the Municipal Pension Plan Funding Standard and Recovery Act shall be payable to the borough.