(a) Member Contributions Required. Deductions shall be made from the salaries of System Members, and such deductions shall be deposited to the credit of and paid into the Fire and Police Tier 2 Service Pension Fund, but no further deductions shall be made from the salaries of System Members who have completed 30 years of service.
(b) Payroll Deduction. The administrative head of the Fire Department and of the Police Department shall cause to be shown on each and every payroll of such department a deduction equal to the sum of the following items:
(1) 6% of the amount of salary, as shown on each such payroll, of each System Member whose name appears thereon; and
(2) that percentage of the amount of salary, as shown on each such payroll, of each System Member whose name appears thereon, but not to exceed 1%, which shall be equal to ½ of the cost of the cost of living benefits provided in this Tier 2 as shall be determined by the Board upon an actuarial valuation obtained by it pursuant to Section 1418.
The Board, from time to time, shall certify in writing to the administrative head of each such department and to the Controller any change in the deductions to be made pursuant to subsection (b)(2) above, and any such change shall become effective as of the next following July 1.
(c) Transfer of Total Member Contributions. The administrative head of each department shall certify to the Controller on each payroll the amount to be deducted from the salary of each System Member whose name appears thereon, and shall cause to be drawn a payroll check in favor of the Board for the total amount of deductions from the salaries of such System Members as shown on each payroll of such department, and the Board shall deposit the payroll check to the credit of the Fire and Police Tier 2 Service Pension Fund. It shall be the duty of the administrative head of each department to cause to be furnished to the Board a copy of each and every payroll.
(d) Deemed Consent to Payroll Deduction. Each System Member shall be deemed to consent and agree to each deduction as provided herein, and the payment of each payroll check to the System Member shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by the System Member during the period covered by each such payroll check, except such claims as the System Member may have to the benefits or payments provided by this Tier 2.
(e) Refund of Member Contributions. Every person who is a System Member on July 1, 1982 shall, upon termination of employment, be entitled to a refund of contributions made by him or her pursuant to the provisions of this section. A person not a System Member on July 1, 1982 and whose employment terminated prior to that date, shall not be entitled to a refund of contributions made by him or her during periods of membership prior to July 1, 1982.
(f) Limitations on Refunds. The refund of contributions shall be subject to the following conditions and limitations:
(1) Contributions Prior to June 30, 1982. Upon termination of employment as a Department Member for any reason except retirement pursuant to the provisions of this Tier 2, a System Member shall be entitled to have refunded to him or her all contributions made by such System Member to the Fire and Police Tier 2 Service Pension Fund on or prior to June 30, 1982, plus 6% interest per annum on such contributions calculated in the same manner as if interest had regularly been credited to the System Member’s contributions, compounded as of the last day of the last pay period of December and to the end of the last pay period preceding the effective date of termination of employment.
(2) Maintenance of Individual Accounts. Starting July 1, 1982, the Board shall maintain an individual account of the contributions of each System Member. Regular interest shall be credited to such individual accounts as of the last day of June and December of each year after July 1, 1982, at such rate as the Board may deem proper in light of the earnings of the funds of the Tier 2 System, exclusive of profits and losses on principal resulting from sales of securities. No such interest shall be credited at any other time. Interest shall be credited to the individual account of a System Member whose employment is terminated for any reason for any period of service between the next preceding last day of June or December and the end of the pay period preceding the date of such termination at the rate at which regular interest was last credited to System Members’ individual accounts.
(3) Election of Refund or Benefits. System Members who elect to receive a refund of contributions, forfeit the right to benefits provided in this Tier 2. After payment of any pension benefit has commenced, the System Member forfeits the right to a refund of his or her contributions. System Members who return to active duty from a disability pension may not thereafter have contributions made by them prior to their retirement on such disability pension refunded. A terminated System Member who had elected to have contributions returned, but who reenters service and again becomes a System Member shall, not withstanding any provision of this Tier 2 to the contrary, not be entitled to credit for years of service previously earned unless he or she shall first have repaid the amount of contributions and interest and an amount calculated as interest which would have been earned between the date of original termination of status as a System Member and the date of reentry into service as a Department Member.
(4) Beneficiary Designation. System Members shall have the right to designate persons who shall be entitled to receive money to which a System Member would otherwise be entitled upon termination of employment, to be payable to such designated person or persons upon the System Member’s death, but no such money shall become payable if any person should be entitled to any other benefit provided in this Tier 2. The Board shall adopt appropriate forms for the designation by System Members of persons who shall be his or her beneficiaries.