(1) Each disability and pension fund must be soundly funded at fiscal yearend. The fund is soundly funded if, subject to subsection (2):
(a) assets in the fund are maintained at a level equal to at least three times but no more than five times the benefits paid by the fund in the previous or current fiscal year, whichever is greater; or
(b) funding is maintained at a level determined by an actuarial valuation to be sufficient to keep the fund actuarially sound.
(2) An actuarial valuation may be requested only by a city, town, or association.