(a) Whenever any person shall have been duly appointed, selected and sworn in as a member in any capacity or rank whatsoever of a regularly constituted police department of the city which may hereafter be subject to the provisions of this chapter, and shall have reached the age of sixty (60) years, shall be retired upon his written application to the board of retirement fund commissioners, and every other member of such a police department who reaches the age of sixty-five (65), or any member who, after reaching the age of sixty (60) years, continues in a regular capacity with that police department and thereafter becomes physically or mentally incapacitated to a degree which prevents efficient service, shall by the order and direction of the board be retired from further service with that city police department. When any person shall have served not less than twenty-five (25) years accumulatively with the same city police department, he may should he so desire have the right to retire at that time, provided he has not reached the age of sixty-five (65) years, and provided further, that whenever that person eligible to retire upon completion of twenty-five (25) years of accumulated service so elects, he may, upon application to the board of police retirement fund commissioners, remain in active service as long as his physical condition permits, or until reaching the age of sixty-five (65) years. When the board issues an order of retirement, the order shall terminate and end the services of a person in the police department, except in cases of extreme emergency as determined by the board of police retirement fund commissioners in cooperation with the chief of police of that city, and the person to be retired shall thereafter during his lifetime be paid from the retirement fund a yearly sum, equal to one-half (1/2) of the average annual salary received by the person during the five (5) highest salary years of his last ten (10) years of service next preceding the date of retirement; provided, however, in cases where the retirement plan was approved by ordinance prior to April 1, 1947, a yearly retirement sum shall be paid which is equal to one-half (1/2) of the amount of salary attached to the rank which he held in the police department of the city for a period of one (1) year next preceding the date of retirement, both of which retirement sums shall be adjusted in proportion to any cost-of-living adjustments made to the salaries of active employees. Provided further, that where a retirement plan was approved by ordinance prior to April 1, 1947, upon completion of twenty (20) years of accumulated service a person subject to this chapter may apply to the board of police retirement fund commissioners for a reduced yearly retirement sum equal to the percentage of full benefits arrived at by dividing the number of years served by twenty-five (25). This percentage reduction in benefits shall be consistent throughout the person’s retirement period.
(b)  The period of time during which any paid policeman who is entitled to retire under the provisions of this chapter, is out of the service with the constituted police department of that city, while on authorized leave of absence, other than leave of absence granted a policeman by reason of injury or illness, and during which period of time the policeman is not carried on the payroll of the police department of the city, shall not be counted as applying to accumulative service under provisions of this chapter, except that this shall not apply to leave of absence granted to any policeman of any city for the purpose of service in the armed forces of the United States. The period of time prior to granting a leave of absence, other than those granted due to injury or illness, or for the purpose of serving in the armed forces of the United States, when the policeman was actually on the payroll of the police department of the city, and period of time the policeman is actually on the payroll of the police department after his return from leave of absence, shall be computed to establish length of accumulated service. Also, providing that any paid policeman coming under the provisions of this chapter, who shall leave the service of the police department and has been repaid any part or all of the moneys paid by him through payroll deductions to the retirement fund, shall, if and when returning to service of that police department, repay the amount of money he was reimbursed, under the provisions of this chapter to the policeman’s retirement fund before becoming eligible to receive retirement pay under the provisions of this chapter.