1. The normal annuity of a retired member shall equal two percent of the final average compensation of the retired member multiplied by the number of years of creditable service of the retired member, except that the normal annuity shall not exceed seventy-five percent of the retired member’s average final compensation.

2. The board, at its last meeting of each calendar year, shall determine the monthly amount for medical insurance premiums to be paid to each retired member during the next following calendar year. The monthly amount shall not exceed four hundred fifty dollars. The monthly payments are at the discretion of the board on the advice of the actuary. The anticipated sum of all such payments during the year plus the annual normal cost plus the annual amount to amortize the unfunded actuarial accrued liability in no more than thirty years shall not exceed the anticipated moneys credited to the system pursuant to section 57.955. The money amount granted here shall not be continued to any survivor.

3. If a member with eight or more years of service dies before becoming eligible for retirement, the member’s surviving spouse, if he or she has been married to the member for at least two years prior to the member’s death, shall be entitled to survivor benefits under option 1 as set forth in section 57.979 as if the member had retired on the date of the member’s death. The member’s monthly benefit shall be calculated as the member’s accrued benefit at his or her death reduced by one-fourth of one percent per month for an early commencement from the member’s normal retirement date: age fifty-five with twelve or more years of creditable service or age sixty-two with eight years of creditable service, to the member’s date of death. Such benefit shall be payable on the first day of the month following the member’s death and shall be payable during the surviving spouse’s lifetime.