(a)  Any active municipal employee who served on active duty in the armed service of the United States or in the merchant marine service of the United States as defined in § 2 of chapter 1721 of the public laws, 1946, may purchase credit for that service up to a maximum of four (4) years, provided that he or she received an honorable discharge; provided, further, that any employee on an official leave of absence for illness or injury is eligible to purchase military credits as defined in this section while on that leave of absence.

(b)  The cost to purchase these credits is ten percent (10%) of the member‘s first year’s earnings as a municipal employee, as defined in this chapter, multiplied by the number of years and fraction of years of armed service up to a maximum for four (4) years.

(c)  There will be no interest charge; provided, the member makes that purchase during his or her first five (5) years of membership in the retirement system, but will be charged regular interest to date of purchase from date of enrollment into membership, if purchased after completing five (5) years of membership; provided, that any member who was in the retirement system prior to July 1, 1980, would not be charged interest whenever he or she purchases the armed services credit.