1. Upon the written application of an active member or of the person‘s employer’s board, any active member who has five or more years of creditable service shall be retired by the board of trustees on a disability retirement allowance, if the medical board after a medical examination of such member, or based on such other medical information as the medical board may require, shall certify that such member is mentally or physically unable to perform such member’s employment duties and that such incapacity is likely to be permanent. Application for a disability retirement allowance may be made after the member ceases to be an active member; provided that, the disability commenced while the member was an active member, and further provided that application is made no later than six months after the disabled member ceases to be an employee of his or her employer. The first monthly payment of such disability retirement allowance shall not be made to such member so long as the member receives compensation from the member’s employer.

2. Upon retirement for disability, a member shall receive a disability retirement allowance which shall be determined in the same manner as the service retirement allowance as set forth in section 169.324, but not less than the minimum disability retirement allowance provided in this section. The minimum disability retirement allowance shall be the lesser of:

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(1) Twenty-five percent of the person’s average final compensation; or

(2) The member’s service retirement allowance calculated based on the member’s final average compensation and the maximum number of years of creditable service the member would have earned had the member remained an employee until attaining the age of sixty.

3. Once each year during the first five years following a member’s retirement on a disability retirement allowance and once in every three-year period thereafter, the board of trustees may require any disability retirant who has not yet attained minimum normal retirement age to undergo a medical examination at a place designated by the medical board, such examination to be made by the medical board or by a physician or physicians designated by such board. Should any such disability retirant refuse to submit to such medical examination, the person’s disability allowance may be discontinued until the person’s withdrawal of such refusal, and should the person’s refusal continue for one year all rights in and to the person’s disability allowance shall be revoked by the board of trustees.

4. Should the board of trustees determine that any disability retirant who has not yet attained minimum normal retirement age is engaged in or is able to engage in a gainful occupation paying more than the difference between the person’s monthly disability retirement allowance plus any Social Security benefits to which the person is eligible and the current rate of monthly compensation for the position the person held at retirement, then the amount of the person’s disability retirement allowance shall be reduced to an amount which together with Social Security benefits and the amount earnable by the person shall equal such current rate of monthly compensation. Should the person’s earning capacity be later changed, the amount of the person’s disability retirement allowance may be further modified. The board of trustees may engage those persons, firms or corporations which it deems necessary to assist the board of trustees in making any determination under this subsection.

5. Should any member retired for disability be restored to active service as a regular employee, the member’s disability retirement allowance shall cease and the member shall again become a member of the retirement system, and contribute thereunder. Anything in sections 169.270 to 169.400 to the contrary notwithstanding, a disability retirant who has not attained the minimum normal retirement age at the date of again becoming a member shall have the person’s creditable service at the time of the person’s disability retirement restored, and the excess of the person’s accumulated contributions at time of retirement over the total payments which the person received during retirement shall be credited to the person’s account. Upon subsequent retirement, the person shall be entitled to a service retirement allowance to the extent the person meets the requisite qualifications, and the person’s prior disability retirement allowance shall not be resumed. If a disability retirant has attained the minimum normal retirement age at the date of again becoming a member, the disability retirement allowance the person was receiving immediately prior to restoration of membership shall be resumed on subsequent retirement, together with such retirement allowances as shall accrue by reason of the person’s latest period of membership. For the sole purpose of determining the person’s eligibility for such additional retirement allowance, but not for determining the amount, all of the person’s years of creditable service, whether before or after the person’s period of disability, for which the person has made contributions which have not been withdrawn, shall be considered.