Ordinary death benefit

(a) Upon receipt by the system of proper proof of a class H member's death occurring in service or while on authorized leave without pay and if no pension is payable under section 88-339, there shall be paid to the member's designated beneficiary an ordinary death benefit as follows: (1) The member's accumulated contributions shall be paid to the member's designated beneficiary if: (A) The member became a member before July 1, 2012, and had less than five years of credited service at the time of death; or (B) The member became a member after June 30, 2012, and had less than ten years of credited service at the time of death; (2) An amount equal to the member's hypothetical account balance shall be paid to the member's designated beneficiary if: (A) The member became a member before July 1, 2012, and had five or more years of credited service at the time of death; or (B) The member became a member after June 30, 2012, and had ten or more years of credited service at the time of death; (3) If the member had ten or more years of credited service at the time of death, the member's designated beneficiary may elect to receive in lieu of any other payment provided in this section, the allowance that would have been payable as if the member had retired on the first day of a month following the member's death, except for the month of December when retirement on the first or last day of the month shall be allowed. Benefits payable under this paragraph shall be calculated under option 3 of section 88-83 and computed on the basis of section 88-332, unreduced for age; or (4) If the member was eligible for service retirement at the time of death, the member's designated beneficiary may elect to receive in lieu of any other payment provided in this section, the allowance that would have been payable as if the member had retired on the first day of a month following the member's death, except for the month of December when retirement on the first or last day of the month shall be allowed. Benefits payable under this paragraph shall be calculated under option 2 of section 88-83 and computed on the basis of section 88-332. (b) If the member's designation of beneficiary is void as specified in section 88-93, or if the member did not designate a beneficiary, the death benefit in the case of ordinary death shall be payable: (1) To the surviving spouse or reciprocal beneficiary, a benefit as specified under subsection (a); (2) To the deceased member's children under age eighteen, if there is no surviving spouse or reciprocal beneficiary, an equally divided benefit as specified under paragraph (1) or (2) of subsection (a); or (3) To the deceased member's estate, if there is no surviving spouse or reciprocal beneficiary or children under the age of eighteen, a benefit as specified under paragraph (1) or (2) of subsection (a). (c) For the purposes of this section, a year round school employee shall be considered in service during the July and August preceding a transfer to a traditional school schedule if the employee was in service for the entire prior school year and has a contract for the upcoming traditional school year. (d) The application for ordinary death benefits shall be filed no later than three years from the date of the member's death.