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Sec. 1212.  Effect of Receipt of Workers’ Compensation.
 
   (a)   Definition.  For the purposes of this section, “compensation” is defined as every payment provided for by any general law granting benefits for injury, sickness or death caused by or arising out of employment, and also includes payments made to satisfy any claim for damages to the extent that the payments relieve the obligation to pay compensation under that general law.
 
   (b)   Coordination of Pension Benefits.  If, pursuant to general law, an award of compensation is made or compensation is paid on account of injury, sickness or death caused by or arising out of employment as a Department Member, then the total amount of any disability or survivor pension granted pursuant to any Tier of the Fire and Police Pension Plans shall be reduced by the total amount of the awarded compensation and the amount remaining after reduction shall be the pension granted.
 
   (c)   Payment Procedure.  If the reduction provided in subsection (b) of this section is applicable to a pension:
 
   (1)   Applied First to Compensation Award.  Any pension payments made under any Tier of the Fire and Police Pension Plans shall be deemed to be, and shall be, payments of the compensation award and shall be first applied as payments of the compensation award.  Any pension payments not applied as satisfaction of the compensation award shall be deemed to be, and shall be, applied as payments of the pension granted.
 
   (2)   Payments Made to the Extent They Exceed Award.  Pension payments shall be made only to the extent that the cumulative sum of the payments of disability or survivor pension provided in any Tier exceed the cumulative sum of the compensation award.
 
   (3)   Limit on Installment Basis.  Compensation awards may be deducted on an installment basis if no installment is less than 25% of any monthly pension amount payable to the Retired Plan Member.
 
   (d)   Service Pensions Not Affected.  The reduction provided in subsection (b) of this section shall not apply to any service pension granted under any Tier of the Fire and Police Pension Plans.  Nor shall any pension be reduced by any compensation which shall be awarded or paid to any Retired Plan Member receiving a service pension under any Tier of the Fire and Police Pension Plans or to any Plan Member who shall die while eligible to retire.  Any deductions made from the salary of any Plan Member and deposited to the credit of any Tier of the Fire and Police Pension Plans shall be applied solely to the cost of service pensions granted under that Tier and never shall cover, directly or indirectly, the cost of any compensation award.