(1) Upon termination of service, a participant is entitled to:
(a) receive a lump-sum distribution of the participant's DROP benefit;
(b) roll the participant's DROP benefit into another eligible retirement plan in a manner prescribed and authorized by the board; or
(c) any other distribution or method of payment of the DROP benefit approved by the board.
(2) A distribution pursuant to this section is subject to the provisions of 19-2-907 and 19-2-909 and all other applicable provisions of Title 19 and the Internal Revenue Code.
(3) The amount of a distribution, rollover, transfer, or other payment of a DROP benefit pursuant to this section must include interest credited to the participant's account as follows:
(a) through June 30, 2009, interest must be credited every fiscal yearend at a rate reflecting the retirement system's annual investment earnings for the applicable fiscal year;
(b) after June 30, 2009, interest must be credited every fiscal yearend at the actuarially assumed rate of return. Proportionate interest must be credited for distributions taking place at other than a fiscal yearend.