1. If a member with five or more years of credited service dies before retirement while an employee, the benefits provided in subsections 2, 3, 4 and 5 of this section shall be paid, as applicable.

2. (1) The surviving spouse to whom the member was married for not less than two years immediately preceding the time of the member’s death shall receive an allowance computed in the same manner in all respects as if such member had:

(a) Retired on the first day of the month following the date of his or her death with an allowance for life based upon the member’s credited service and final average salary to time of death and without reduction if the member’s age was younger than the member’s minimum service retirement age;

(b) Elected option A provided for in section 70.660; and

(c) Nominated such spouse as joint beneficiary under such option.

(2) If the board finds that the member’s death was the result of an accident that did not arise out of and in the course of his or her actual performance of duty as an employee, the requirement that the surviving spouse must have been married to the member for not less than two years immediately preceding the time of the member’s death shall not apply.

3. If the board finds that the member’s death was the natural and proximate result of a personal injury or disease arising out of and in the course of his or her actual performance of duty as an employee, then:

(1) Other provisions of law to the contrary notwithstanding, for the purpose of computing the amount of the allowance payable under this section and for the purpose of determining eligibility under subsection 1 of this section, credited service shall include the period from the date of the member’s death to the date he or she would have attained age sixty, or the date he or she would have acquired five years of credited service, if later; and

(2) In order to be eligible for spouse benefits, the surviving spouse and the deceased member must have been married on the date of the personal injury resulting in the member’s death or on the date of onset of the disease resulting in the member’s death. In any case of question as to the date of onset of disease resulting in the member’s death, the board shall decide the question.

4. If a benefit is not payable under the provisions of subsection 2 or 3 of this section, or when such benefit has ceased to be payable, each dependent child of the deceased member, if any, shall receive an allowance of an equal share of sixty percent of an allowance computed in the same manner in all respects as if such deceased member had retired on the first day of the month following the date of his or her death with an allowance for life based upon the member’s credited service and final average salary to time of death and without reduction if the member’s age was younger than the member’s minimum service retirement age. A child shall be a dependent child until the child’s death or marriage or attainment of age eighteen, whichever occurs first; provided, the age eighteen maximum shall be extended as long as the child continues uninterruptedly being a full-time student at an accredited secondary school or college or university, but in no event beyond attainment of age twenty-three; provided further, that if a full-time student eligible for or receiving benefits under this section is ordered to military duty, his or her benefit shall be suspended during such period of military duty, and shall be reinstated upon his or her return to school not later than the beginning of the academic term immediately following his or her return from military duty, in which case his or her eligibility for dependent child benefits shall be extended by the number of months of military duty, but in no event beyond attainment of age twenty-five; provided further, the age eighteen maximum shall be extended for any child who has been found totally incapacitated by a court of competent jurisdiction for as long as such incapacity exists. Upon a child ceasing to be a dependent child, his or her allowance shall terminate, and there shall be a redetermination of the amounts payable to any remaining dependent children.

5. In the event all of the allowances provided for in this section, payable on account of the death of a member, terminate before there has been paid an aggregate amount equal to the accumulated contributions standing to the deceased member’s credit in the member’s deposit fund at the time of death, the difference between such accumulated contributions and such aggregate amount of allowance payments shall be paid to such person as the member shall have nominated by written designation duly executed and filed with the board. If there be no such designated person surviving at termination, such difference shall be paid to the member’s estate or to the estate of the last beneficiary to whom benefits were paid.