(3) Except as limited by Subsections (6) and (7), if a participating employer does not make the contributions required by this title within 60 days of the end of the pay period, the participating employer is liable to the office as provided in Section 49-11-604 for:

1. (a) delinquent contributions;
2. (b) interest on the delinquent contributions as calculated under Section 49-11-503; and
3. (c) a 12% per annum penalty on delinquent contributions.

(6)

1. (a) An employer described in Subsections 49-13-202(2)(c) or (d) that paid retirement benefits to an employee or retiree that were not required by this title may offer the retirement benefits paid to the employee as a substantial substitute to service credit and retirement benefits that may have been earned by the employee under this title.

2. (b) An employee who received retirement benefits under Subsection (6)(a) may sign an affidavit that:

   1. (i) acknowledges the substantial substitute received by the employee under Subsection (6)(a); and
   2. (ii) irrevocably relinquishes service credit and retirement benefits that may have accrued to the employee under this title effective from the employee's date of employment with the employer described in Subsection (6)(a) to the date of the employer's election under Section 49-13-202.
3. (c) Nothing in this section shall be construed to diminish an employer's right to recover past retirement benefits other than Social Security, paid to an employee or retiree, in error or under mistaken belief that the employer was not a participating employer.

(7) If the employer files with the office an irrevocable written relinquishment of service credit signed by the member or retiree:

1. (a) the office shall proportionally reduce any delinquent contributions, penalties, fees, or interest assessed against a participating employer in connection with a member or retiree described in Subsection (6)(a); and
2. (b) the system has no liability to the employee for benefits relinquished under Subsection (6)(b).