(a) Upon the death of a member in service who has reached the applicable eligibility requirements for an early or service retirement allowance as set forth in part 2 or 3 of this chapter, a retirement allowance shall be paid to the member's surviving designated beneficiary, if any.

(1) No benefits shall be payable under this subsection (a) on account of any member on whose account a benefit is payable under any other provision of chapters 34-37 of this title.

(2) The retirement allowance payable to the beneficiary shall be equal to the retirement allowance which would have been payable had the member retired under an effective election of Option 1 as provided in part 6 of this chapter with such person nominated as the beneficiary under the option.

(3)

(A) Notwithstanding any other law to the contrary, if the member's spouse is the designated beneficiary on the date of the member's death, and if that spouse should thereafter die leaving a surviving minor child or children of the member, then the annuity the spouse was receiving under this subsection (a) shall be divided equally among the member's surviving minor children. Each child shall receive the child's share until the first day of the month following the month in which the child dies or reaches twenty-two (22) years of age, whichever occurs first, at which time the annuity shall be redistributed equally among the remaining children.

(B) If the member's spouse is designated as the sole beneficiary on the date of the member's death, and if that spouse predeceased the member or died in a common accident or occurrence with the member, then the member's surviving minor child or children shall be entitled to the same annuity as set forth in subdivision (a)(3)(A).

(b)

(1) Upon the death of a member in service who is vested, a retirement allowance shall be paid to the member's surviving spouse, if any, if the spouse is designated as beneficiary.

(A) No benefits shall be payable under this subsection (b) on account of any member on whose account a benefit is payable under any other provision of chapters 34-37 of this title.

(B) The retirement allowance payable to the surviving spouse shall be equal to the retirement allowance which would have been payable had the member retired under an effective election of Option 1 as provided in part 6 of this chapter with the member's spouse nominated as the beneficiary under that option.

(C) The retirement allowance payable under this subsection (b) shall be reduced by four tenths of one percent (0.4%) for each month by which the member's death precedes the member's service retirement date.

(D) This subsection (b) does not apply to members in the employ of a political subdivision unless the governing body of the political subdivision authorizes by resolution and accepts the liability therefor.

(2) Should the governing body of a political subdivision elect not to accept the liability for its employees to receive a survivor's benefit in accordance with this subsection (b), a survivor's benefit shall be paid in accordance with subsection (a).

(c) A member shall be considered to be “in service” under this section, even though the member is no longer participating in this system because of advanced age, so long as the member continues to be employed by the same employer.

(d) Upon the death of a member in service who has completed ten (10) years of creditable service, a retirement allowance shall be paid to the member's nominated beneficiary, if any.

(1) No benefits shall be payable under this subsection (d) on account of any member on whose account a benefit is payable under any other provision of chapters 34-37 of this title.

(2) The retirement allowance payable to the beneficiary shall be determined by converting the lump sum benefit payable under § 8-36-107 into a monthly annuity payable over a period not to exceed one hundred twenty (120) months. The present value of the monthly annuity shall be equal to the lump sum benefit payable in accordance with § 8-36-107. The interest rate used in calculating the present value shall be based on the interest rate payable by annuity companies in the open market on the date the monthly benefit commences. The interest rate shall not be lower than the rate established by the board of trustees under § 8-34-505.

(3) In the event the beneficiary dies before receiving all of the benefits payable under subdivision (d)(2), a lump sum payment equal to the actuarial equivalent of the monthly benefit due over the remaining months in the one-hundred-twenty month period shall be paid to the beneficiary's estate in accordance with § 8-36-120.