(a) On withdrawing from service pursuant to Section 36-27-16, a member who participated in DROP:

(1) Who fulfilled his or her contractual obligation pursuant to DROP shall receive a lump-sum payment from his or her DROP account equal to the payments made to that account on his or her behalf plus interest. Further, the member shall receive his or her accumulated contribution made during participation in DROP, together with interest for the period of DROP participation as provided in subdivision (1) of subsection (c) of Section 36-27-16. In lieu of a lump-sum payment from the DROP account, to the extent eligible under applicable tax laws, the member's total accrued benefit may be "rolled over" directly to the custodian of an eligible retirement plan. The member shall also begin receiving his or her monthly benefit which had been paid directly into the DROP account during his or her participation in DROP. However, if applicable laws allow, the monthly benefit may be recalculated prospectively to reflect accrued sick leave as credit for retirement purposes. If applicable laws allow, the participant may elect to be paid for his or her sick leave as would any other member upon retirement. In no event can the number of sick leave days used for either calculation be greater than the number of days the participant had on entry into DROP. The member is not allowed to change the option allowance chosen at the beginning of DROP participation.

(2) Who did not fulfill his or her obligation under DROP due to involuntary termination, disability, or involuntary transfer of his or her spouse, shall receive a lump-sum payment from his or her DROP account equal to the payments made to that account on his or her behalf plus interest. Further, the member shall receive his or her accumulated contribution made during participation in DROP, together with interest for the period of DROP participation as provided in subdivision (1) of subsection (c) of Section 36-27-16. In lieu of a lump-sum payment from the DROP account to the extent eligible under applicable tax laws, the member's total accrued benefit may be "rolled over" directly to the custodian of an eligible retirement plan. The member shall also begin receiving his or her monthly benefit which had been paid into the DROP account during his or her participation in DROP. However, if applicable laws allow, the monthly benefit may be recalculated prospectively to reflect accrued sick leave as credit for retirement purposes. If applicable laws allow, the participant may elect to be paid for his or her sick leave as would any other member upon retirement. In no event can the number of sick leave days used for either calculation be greater than the number of days the participant had on entry into DROP. The member is not allowed to change the option allowance chosen at the beginning of DROP participation.

(3) Who did not fulfill his or her obligation under DROP due to voluntary termination within the first three years of participation shall forfeit a portion of his or her DROP account that constitutes the retirement allowance. The member will be entitled to a return of his or her member contributions made during his or her participation in DROP as well as any interest attributable to the retirement allowance. However, following termination of employment, the member shall begin receiving his or her monthly benefit which had been paid directly into the DROP account during his or her participation in DROP. However, if applicable laws allow, the monthly benefit may be recalculated prospectively to reflect accrued sick leave as credit for retirement purposes. If applicable laws allow, the participant may elect to be paid for his or her sick leave as would any other member upon retirement. In no event can the number of sick leave days used for either calculation be greater than the number of days the participant had on entry into DROP. The member is not allowed to change the option allowance chosen at the beginning of DROP participation.

(b) If a participant dies during the period of participation in DROP, a lump-sum payment equal to the payments made to the DROP account on his or her behalf plus interest shall be paid to his or her named beneficiary or, if none, to his or her estate. Further, the beneficiary of the estate shall be entitled to a return of the member's contribution made during his or her participation in DROP together with interest for the period of DROP participation as provided in subdivision (1) of subsection (c) of Section 36-27-16. However, death benefits payable pursuant to subsection (c) of Section 36-27-16 or Section 36-27B-3 shall not be applicable. Where there is a beneficiary who would be entitled to an ongoing monthly benefit, if applicable laws allow, the monthly benefit may be recalculated prospectively to reflect accrued sick leave as credit for retirement purposes. If applicable laws allow, the beneficiary may elect to be paid for the deceased member's sick leave as would any other member upon retirement. In no event can the number of sick leave days used for either calculation be greater than the number of days the participant had on entry into DROP. The member is not allowed to change the option allowance chosen at the beginning of DROP participation.

(c) At the end of the specified period for DROP:

(1) Payments into the DROP account made on behalf of the member shall cease.

(2) Payment from the DROP account shall not be made to the member until he or she withdraws from service, nor shall the monthly retirement allowance being paid into the DROP account during the period of participation be payable to the member until he or she withdraws from service pursuant to Section 36-27-16. However, if applicable laws allow, the monthly benefit may be recalculated prospectively to reflect accrued sick leave as credit for retirement purposes. If applicable laws allow, the participant may elect to be paid for his or her sick leave as would any other member upon retirement. In no event can the number of sick leave days used for either calculation be greater than the number of days the participant had on entry into DROP. The member is not allowed to change the option allowance chosen at the beginning of DROP participation.

(3) If the member does not withdraw from service after the period specified for participation in DROP, he or she shall resume active contributing membership in the system for the purpose of earning creditable service. Under no circumstance will any time spent participating in DROP be eligible to constitute service credit in any Alabama public supported retirement system.

(d)(1) Upon a future withdrawal from service, the member shall receive a lump-sum payment from his or her DROP account equal to the payments made to that account on his or her behalf plus interest. Further, the beneficiary of the estate shall be entitled to a return of the member's contribution made during his or her participation in DROP together with interest for the period of DROP participation as provided in subdivision (1) of subsection (c) of Section 36-27-16. In lieu of a lump-sum payment from the DROP account, to the extent eligible under applicable tax laws, the member's total accrued benefit may be "rolled over" directly to the custodian of an eligible retirement plan.

(2) Upon withdrawal from service, the monthly retirement allowance that was being originally paid into the DROP account shall begin to be paid to the member. However, if applicable laws allow, the monthly benefit may be recalculated prospectively to reflect accrued sick leave as credit for retirement purposes. If applicable laws allow, the participant may elect to be paid for his or her sick leave as would any other member upon retirement. In no event can the number of sick leave days used for either calculation be greater than the number of days the participant had on entry into DROP. The member is not allowed to change the option allowance chosen at the beginning of DROP participation.

(3) Upon withdrawal from service, the member shall receive an additional retirement benefit based on his or her additional service rendered to the system since termination of participating in DROP, using the normal method of computation of benefit for that period only. This additional service shall not be added to any service prior to his or her participation in DROP. The member's average compensation for that time worked after the participation in DROP shall be multiplied by the appropriate benefit factor multiplied by the amount of time worked after the participation in DROP. Under no circumstances is this service to be combined with service prior to participation in DROP.

(4) The option used for retirement purposes shall be that applicable to the original benefit.

(5) If the member dies or becomes disabled during the period of additional service, he or she shall be considered as having retired on the date of death or commencement of disability. However, no death benefits pursuant to subsection (c) of Section 36-27-16 or Section 36-27B-3 will be applicable.