(1) “Department” means the fire department or police department of any municipality that pays wages to its employees for services rendered;

(2) “Employee” means any person who, on the adoption of this part, is a paid employee in the fire department or police department of any municipality and a member of a municipal retirement system or pension plan;

(3) “Municipality” means any municipality having its own employees retirement system or pension plan;

(4) “Retired employee” means any person who has been a paid employee in the fire department or police department of any municipality and who, on the adoption of this part, is receiving from such municipality a retirement allowance based upon such person's service in such department;

(5) “Retirement allowance” means the monthly payment for life made to a retired employee or the retired employee's survivors or beneficiaries under a municipal employees retirement system or pension plan;

(6) “Retirement system” or “pension plan” means an existing system or plan by which a municipality is paying or will pay the retired employees of its fire department or police department a retirement allowance after such employees have complied with certain conditions or requirements of employment or service to the municipality; and

(7) “Survivor or beneficiary” includes any person, who is receiving, or who is entitled to receive, an allowance or survivor benefit from a retirement system that is based upon the retirement allowance of an employee or a retired employee.