(1) During a twelve-month period, that person does not work more than one hundred twenty (120) days or the equivalent of one hundred twenty (120) days; or if employed as a teacher by an institution of higher learning, twenty-four (24) quarter credit hours or eighteen (18) semester credit hours;

(2) For temporary employment periods commencing on or after July 1, 2002, the entire compensation payable to the retired member for the work shall not exceed an amount equal to the sum of sixty percent (60%) of the annual full-time salary received by the retired member in the year immediately prior to the member's last paid day of covered employment, adjusted by five percent (5%) for each year since the member's last paid day of covered employment or by such other percentage as may be determined by the treasurer and the commissioner of human resources. In determining such percentage for any given year, the treasurer and the commissioner of human resources may consider any matter which, in their discretion, they deem relevant including, but not limited to, the condition of the labor market and the ability to fill the respective positions;

(3) The retired member may work in addition to the one hundred twenty (120) days prescribed above if employed as a substitute teacher in a public school system; provided, that the director of such school system certifies to the division of retirement that no other qualified personnel are available to substitute teach during such period, and that the compensation payable to the retired member for such work does not exceed the rate of compensation set by the public school system for substitute teachers filling similar vacant positions; and provided further, that the total salary paid to any such retired member for teaching during the twelve-month period shall not exceed the pertinent pro rata share of average salary being paid at the institution in the academic discipline concerned;

(4) The retired member does not return to service until the expiration of at least sixty (60) calendar days from the member's effective date of retirement, unless such member returns to service in a position wherein the member renders no more than one-half (½) the hours the member was scheduled to work prior to retirement and the head of the employing entity certifies to the division of retirement that no other qualified persons are reasonably available to fill the position;

(5) The head of the employing entity or the head's designee:

(A) Shall certify to the retirement division the member's name, period to be employed, number of days to be worked, compensation to be paid, and anticipated termination date. The certification shall be made in the manner prescribed by the retirement division and shall be filed annually, if applicable, and acknowledged by the member;

(B) Shall submit a statement showing working hours and compensation for the retiree when requested; and

(C) Shall be subject to audit to verify working hours and the compensation being paid;

(6) Should the period of return to service or the compensation therefor exceed that specified in this section, the person's monthly retirement allowance shall be reduced by the greater of the following:

(A) Each day worked in excess of the limitation shall result in the loss of one-twentieth (⁄) of the monthly retirement allowance; or

(B) Any compensation received in excess of the limitation shall reduce the retirement allowance payable by the ratio such compensation exceeds the limitation;

(7) The retirement system is authorized to obtain reimbursement for any retirement benefits overpaid as a result of a retiree's reemployment in excess of that permitted by this section, by deductions from a retiree's monthly benefit; and

(8) The retiree will not accrue any additional retirement credit during the retiree's period of reemployment.