(a) Upon the death of a member not in service whose death occurs on or after July 1, 1991, and who has completed ten (10) years of creditable service, a retirement allowance shall be paid to the member's surviving spouse, if any, if the spouse is designated as beneficiary.

(1) 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 2 as provided in part 6 of this chapter with the member's spouse nominated as the beneficiary under that option.

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

(b)

(1) Effective July 1, 1991, a member who does not qualify for a disability retirement allowance under § 8-36-501 or § 8-36-502 and who suffers from a total and permanent disability may be retired by the board of trustees on an ordinary disability retirement allowance provided the following conditions are met:

(A) The member files with the retirement division an application for the retirement allowance in the manner prescribed by the retirement division;

(B) Competent medical evidence is provided by the member which conclusively documents that the member is totally and permanently disabled from engaging in any type of substantial gainful activity;

(C) The member has completed the service requirement for such member's classification as set forth in § 8-36-501(b); and

(D) The member does not otherwise qualify for a service retirement allowance as provided for in §§ 8-36-201 — 8-36-205.

(2) Any member who applies for an ordinary disability retirement allowance pursuant to this subsection (b) shall be subject to §§ 8-36-503 — 8-36-505 and § 8-36-508.

(3) The amount of the ordinary disability retirement allowance shall be the actuarial equivalent of the retirement allowance which would be payable to the member at fifty-five (55) years of age pursuant to part 3 of this chapter. Notwithstanding the preceding sentence, any allowance payable under this subsection (b) shall be subject to § 8-36-501(c)(4), (5) and (7).

(c) This section does not apply to members in the employ of a political subdivision unless the governing body of the political subdivision by resolution authorizes and accepts the liability for such benefits.