-Establishes that if a peace officer is incapacitated while on duty, then he or she will receive a fixed pay when approved by a physician without using the peace officer's sick leave (Sec. 1). -Authorizes a retired beneficiary to qualify for continued retirement benefits if he or she submits a request along with any other requested documentation to determine the beneficiaries gross wages within 60 days from May 15th to the board of trustees every year (Sec. 5). -Establishes the "applicable employee percentage," as follows (Sec. 8):

-9.35 percent from July 1, 2006 to June 30, 2011; -9.85 percent beginning July 1, 2011; -10.35 percent beginning July 1, 2012; -10.85 percent beginning July 1, 2013; and -11.35 percent beginning July 1, 2014 and continuing for each fiscal year following.

-Establishes that if the general assembly decides after January 1, 2011 that the costs cannot be absorbed with the set contribution rate then the contribution rate will be increased to cover costs (Sec. 9). -Establishes that beginning July 1, 2012, if the board decides that the ratio to assets is 85 percent then $5 million will be allocated to the retirement fund (Sec. 13). -Requires that the contribution rate cannot fall below 17 percent with state allocations (Sec. 13). -Establishes that "final average covered wage" is the average of the member's highest 5 years of service (Sec. 19). -Establishes that the covered wage amount is 134 percent of the member's applicable calendar year wages (Sec. 19). -Establishes that a member "vested by service" is a member who meets one of the following requirements (Sec. 22):

-Is at least 48 and served 8 years before July 1, 1965; -Served 8 years between July 1, 1965 and June 30, 1973; -Served 4 years between July 1, 1973 and June 30, 2012; or -Served 4 years of special service or 7 years of regular service after July 1, 2012.

-Establishes that a portion of a member's retirement allowance after June 30, 2012 is 0.5 percent of each month if the member is under the age of 65 (Sec. 30). -Establishes that "employee-exercised reduction in pay" is the employee's decision to receive a reduction in pay in order not to be laid off by the employer (Sec. 36). -Requires the board of trustees to review the benefits and finances and report their findings to the general assembly every year (Sec. 45). -Requires a medical condition to have been known to exist on the date that membership commenced if the medical condition is reflected in any record or document completed or obtained in accordance with the system's medical protocols (Sec. 45). -Authorizes a non-spouse beneficiary who is the designated beneficiary to roll over retirement benefits after December 31, 2009 (Sec. 47). -Specifies that if a member dies during military service, the survivors of that member will receive his or her benefits (Sec. 50). -Authorizes that if a member is serving in the armed services, the employer will pay the employee as if he or she were an active member and the differential wage payment is treated as compensation (Sec. 51).

-Establishes that if a peace officer is incapacitated while on duty, then he or she will receive a fixed pay when approved by a physician without using the peace officer's sick leave (Sec. 1). -Authorizes a retired beneficiary to qualify for continued retirement benefits if he or she submits a request along with any other requested documentation to determine the beneficiaries gross wages within 60 days from May 15th to the board of trustees every year (Sec. 5). -Establishes the "applicable employee percentage," as follows (Sec. 8):

-9.35 percent from July 1, 2006 to June 30, 2011; -9.85 percent beginning July 1, 2011; -10.35 percent beginning July 1, 2012; -10.85 percent beginning July 1, 2013; and -11.35 percent beginning July 1, 2014 and continuing for each fiscal year following.

-Establishes that if the general assembly decides after January 1, 2011 that the costs cannot be absorbed with the set contribution rate then the contribution rate will be increased to cover costs (Sec. 9). -Establishes that beginning July 1, 2012, if the board decides that the ratio to assets is 85 percent then $5 million will be allocated to the retirement fund (Sec. 13). -Requires that the contribution rate cannot fall below 17 percent with state allocations (Sec. 13). -Establishes that "final average covered wage" is the average of the member's highest 5 years of service (Sec. 19). -Establishes that the covered wage amount is 134 percent of the member's applicable calendar year wages (Sec. 19). -Establishes that a member "vested by service" is a member who meets one of the following requirements (Sec. 22):

-Is at least 48 and served 8 years before July 1, 1965; -Served 8 years between July 1, 1965 and June 30, 1973; -Served 4 years between July 1, 1973 and June 30, 2012; or -Served 4 years of special service or 7 years of regular service after July 1, 2012.

-Establishes that a portion of a member's retirement allowance after June 30, 2012 is 0.5 percent of each month if the member is under the age of 65 (Sec. 30). -Establishes that "employee-exercised reduction in pay" is the employee's decision to receive a reduction in pay in order not to be laid off by the employer (Sec. 36). -Requires the board of trustees to review the benefits and finances and report their findings to the general assembly every year (Sec. 45). -Requires a medical condition to have been known to exist on the date that membership commenced if the medical condition is reflected in any record or document completed or obtained in accordance with the system's medical protocols (Sec. 45). -Authorizes a non-spouse beneficiary who is the designated beneficiary to roll over retirement benefits after December 31, 2009 (Sec. 47). -Specifies that if a member dies during military service, the survivors of that member will receive his or her benefits (Sec. 50). -Authorizes that if a member is serving in the armed services, the employer will pay the employee as if he or she were an active member and the differential wage payment is treated as compensation (Sec. 51).