(a) The board may terminate the participation of an employer in the prefunding plan if any of the following apply:
(1) An employer elects to cease to participate in the prefunding plan.
(2) The board finds that the participating employer has failed to satisfy the terms and conditions required by this chapter, by board rules or regulations, or by the contract between the governing body of that participating employer and the board.
(3) The board terminates the prefunding plan.
(b) The board may, in its discretion, authorize an employer to transfer assets into or out of the prefunding plan. That transfer of assets shall comply with all of the following:
(1) The transfer shall satisfy the terms of the contract between the governing body of that participating employer and the board.
(2) The transfer shall satisfy the requirements under the applicable rules of the Governmental Accounting Standards Board.
(3) The transfer shall satisfy the requirements of a trust established under Section 115 of the Internal Revenue Code.
(c) If the board terminates the participation of an employer in the prefunding plan as described in paragraph (1) or (2) of subdivision (a), the assets attributable to the contributions by that employer shall remain in the prefunding plan, for the continued payment of required pension contributions and the costs of administration, pursuant to the terms and conditions of participation established by the board and as agreed to by the employer.