(a) Upon the death of any person, after retirement and while receiving a retirement allowance from this system, there shall be paid to his or her beneficiary as he or she shall nominate by written designation duly executed and filed with the board, the sum of five hundred dollars ($500), to be provided from contributions by the state or contracting agency, as the case may be.
(b) This section shall apply to all contracting agencies and to the employees of those agencies.