§88-338  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)  If the member had less than five years of
credited service at the time of death, the member's accumulated contributions
shall be paid to the member's designated beneficiary;



(2)  If the member had five or more years of credited
service at the time of death, an amount equal to the member's hypothetical
account balance shall be paid to the member's designated beneficiary;



(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. [L 2004, c 179, pt of §1; am L 2006, c 169, §37; am L 2007, c 215, §26]