Sec. 7.02. COMPUTATION OF DISABILITY BENEFIT. (a) On award of disability retirement benefits, the member shall receive a disability retirement benefit computed in the same manner that a service retirement benefit would be computed at the member's normal retirement date, based on average final compensation and creditable service at date of disability retirement without reduction for early retirement. If the disability is a direct or proximate result of the performance of the member's employment duties with the system or the city, then the disability retirement benefit will be subject to a minimum benefit based on average final compensation at date of disability retirement and 20 years of creditable service. The options allowed are life annuity or its actuarial equivalent payable in the form described as Option I, Option II, Option III, Option IV, or Option V in Section 6.03 of this Act. The disability benefits paid to the member will be paid from Fund No. 1 until the amount received equals the member's accumulated deposits; thereafter the benefits will be paid from Fund No. 2.

(b) For purposes of this section, in computing the actuarial equivalent for optional forms of annuity payment for disability benefits under this section, 82.5 percent of the 1965 Railroad Retirement Board Disabled Annuitants Mortality Table shall be used for members, the UP-1984 Table with an age setback of six years shall be used for beneficiaries, and interest shall be computed at a rate of 8.5 percent.