1. (a) The retirement benefit for a member who enters the DROP and retires on:

   1. (1) the member's DROP retirement date; or

   2. (2) the date the member retires because of a disability as provided under section 16.5(d) of this chapter;

      is determined under this chapter rather than under the provisions of the applicable fund.

2. (b) A member who retires on the member's DROP retirement date or on the date the member retires because of a disability as provided under section 16.5(d) of this chapter may elect to receive a retirement benefit in one of the following forms:

   1. (1) A retirement benefit paid by and calculated under the provisions of the applicable fund as if the member had never entered the DROP.

   2. (2) A retirement benefit paid by the applicable fund and consisting of:

      1. (A) the DROP frozen benefit; plus

      2. (B) an additional amount, paid as the member elects under subsection (c), calculated by multiplying:

         1. (i) the amount of the DROP frozen benefit; by
         2. (ii) the number of months that the member was in the DROP.

3. (c) A member who chooses the retirement benefit described in subdivision (b)(2) must elect to receive the additional amount described in subdivision (b)(2)(B) as:

   1. (1) a lump sum paid on:

      1. (A) the member's DROP retirement date; or
      2. (B) the date the member retires because of a disability as provided under section 16.5(d) of this chapter; or

   2. (2) three (3) equal annual payments:

      1. (A) commencing on:

         1. (i) the member's DROP retirement date; or
         2. (ii) the date the member retires because of a disability as provided under section 16.5(d) of this chapter; and

      2. (B) thereafter paid on the anniversary of:

         1. (i) the member's DROP retirement date; or
         2. (ii) the date the member retires because of a disability as provided under section 16.5(d) of this chapter.

4. (d) In calculating a member's retirement benefit under this chapter, the applicable fund must use the lesser of:

   1. (1) the member's actual years of service; or
   2. (2) thirty-two (32) years of service.
5. (e) Except as provided under section 16.5(d) of this chapter, the retirement benefits for a member who exits the DROP for any reason other than retirement on the member's DROP retirement date are calculated under the provisions of the applicable fund as if the member had never entered the DROP.

As added by P.L.62-2002, SEC.5. Amended by P.L.148-2007, SEC.3.