Effective July 1, 1968, there shall be created the Preretirement Death Benefit Program, which shall be effective as of that date to all employers under the System except counties, municipalities and other political subdivisions, as well as those State departments, agencies or institutions which pay directly to the System the total employer contributions for the participating members in their employ.

The Program shall be available to those employers exempted in the preceding paragraph by written application of such employer. Applications shall be an irrevocable commitment to participate under the Program. For applications received by the System prior to October 1, 1968, the effective date of the coverage shall be July 1, 1968. For all other applications the effective date shall be July first next following the date of receipt by the System of the application.

Upon proof satisfactory to the board of the death of a contributing member in service after completion of at least one full year of membership or of the death of a contributing member as a result of an injury arising out of and in the course of the performance of his duties regardless of length of membership, whose employer is participating in the program, there must be paid to the person he nominated for the refund of his accumulated contributions, unless he has nominated a different beneficiary by written designation filed with the board, pursuant to Section 9-11-110, if the person is living at the time of the member's death, otherwise to the member's estate, a death benefit equal to the annual compensation of the member at the time his death occurs. The death benefit is payable apart and separate from the payment of the amount provided by Section 9-11-110. For purposes of this section, a member is considered to be in service at the date of his death if the last day the member was employed in a continuous, regular pay status, while earning regular or unreduced wages and regular or unreduced retirement service credit, whether the member was physically working on that day or taking continuous accrued annual leave or sick leave while receiving a full salary, occurred not more than ninety days before the date of his death and he has not retired.

Notwithstanding any other provision of law, contributions to support the Preretirement Death Benefit Program shall be made by participating employers to a separate account. The contributions shall commence on the July first following the effective date of coverage and shall be equal to one percent of the compensation of eligible members, provided that such rate of contribution shall be subject to periodic adjustment on the basis of actual experience and the recommendation of the actuary. All death benefit payments made under this Program shall be a charge against this account.

The Board is authorized to take such action as may be necessary to provide the death benefits under this section in the form of group life insurance upon a determination that to do so would guarantee a more favorable tax treatment of the benefit to beneficiaries to whom such benefit is payable.

Upon the death of a retired member on or after July 1, 2000, there must be paid to the designated beneficiary or beneficiaries, if living at the time of the retired member's death, otherwise to the retired member's estate, a life insurance benefit of two thousand dollars if the retired member had ten years of creditable service but less than twenty years, four thousand dollars if the retired member had twenty years of creditable service but less than twenty-five, and six thousand dollars if the retired member had at least twenty-five years of creditable service at the time of retirement, if the retired member's most recent employer prior to retirement is covered by the Group Life Insurance Program.