Once each year the retirement board may, and upon his or her application shall, require any disability beneficiary under the minimum age of service retirement to undergo a medical examination, the examination to be made at the place of residence of the beneficiary, or other place mutually agreed upon, by a physician or physicians engaged by the retirement board. If the examination indicates that the beneficiary is able to engage in a gainful occupation, his or her name shall be placed on appropriate lists of candidates prepared for appointment to positions in his or her department or agency for which he or she is stated to be qualified, of a salary grade not exceeding that from which he or she was last retired. Should the beneficiary be engaged in a gainful occupation or should he or she be offered service as a result of the placing of his or her name on a list of candidates, the retirement board shall adjust, and, from time to time readjust, the amount of his or her disability benefit to an amount which shall not exceed the rate of benefit upon which he or she was originally retired, and which, when added to the amount then earnable by him or her, shall not exceed his or her rate of annual compensation currently for the classification that the disability annuitant held prior to retirement. Should any disability beneficiary under the minimum age of service retirement refuse to submit to one medical examination in any year by a physician or physicians designated by the retirement board, his or her benefit shall be discontinued until his or her withdrawal of the refusal, and should his or her refusal continue for one year, all his or her rights in and to the benefit shall be revoked by the retirement board. A disability beneficiary, reinstated to active service, shall be reinstated as a member and participate in the rights of the retirement system, to the same extent as any other teacher.