(b) Any person reemployed as provided in this subsection shall resume making employee contributions, and the employer shall make contributions on behalf of the person as provided in ORS 238.225. Except as provided in paragraph (c) of this subsection, payments of retirement allowance and other benefits received by the person, including lump sum or installment payments received by the person under ORS 238.305 (2) or (3), shall not be repaid into the retirement fund after the person reenters public employment. Upon reemployment under this subsection, the board shall cease making payments of retirement allowance and other benefits to the person, including installment payments to the person under ORS 238.305 (4). The board shall reestablish the member account of the person and reduce the account by all payments of retirement allowance and other benefits, including installment payments, that were previously received by the person and that were derived from the member account. Amounts that were credited to the reserve established by the board for the payment of the person’s benefits that were not derived from the member account shall be credited pro rata to the funds from which the amounts were derived.

(c) Upon reemployment under this subsection, the former retirement of the reemployed person and any election of option for payment of retirement benefits made by the person shall be canceled. When the person again retires the person may elect any option for payment of retirement benefits authorized by this chapter, except that a person who elected to receive a service retirement benefit pursuant to ORS 238.305 (2) or (3) at the time of former retirement may not elect any other option at the time of subsequent retirement unless an amount equal to the lump sum and the interest that would have accumulated on the sum has been repaid by the employee to the fund. Upon such subsequent retirement any prior service pension due the employee shall be derived from the unused portion of the prior service credit reserve and shall be calculated on the basis of then attained age.

(2) A member who has been retired for service for less than six consecutive calendar months may be reemployed by a participating public employer only upon immediate repayment in a lump sum by the member of the amount of retirement benefits drawn. The member account of the member shall be reestablished just as it was at the time of former retirement after the lump sum repayment is made.

(3) If a member of the system who retired before August 21, 1981, is reemployed, as provided in subsection (1) or (2) of this section, beginning on or after August 21, 1981, the service retirement allowance received upon subsequent retirement by the member shall be:

(a) For service before August 21, 1981, an allowance including a current service pension computed on the basis of ORS 237.147 (2) (1979 Replacement Part).

(b) For service on or after August 21, 1981, an allowance including a current service pension computed on the basis of ORS 238.300 (2).

(4) A person may be reemployed by a public employer that is not participating in the system, or may be employed by a participating public employer in a position that is in a class of employees that was not designated by the public employer under ORS 238.035 as a class of employees that become members of the system, without affecting the person’s status as a retired member or the person’s continued receipt of retirement benefits.

(5) Subsection (4) of this section does not apply to any member who retires under the provisions of ORS 238.280 (1), (2) or (3). [Formerly 237.125; 2001 c.945 §10; 2003 c.625 §33a; 2005 c.808 §39; 2007 c.404 §3; 2009 c.390 §6]