Notwithstanding any other provisions to the contrary in chapters 34-37 of this title, if a local retirement fund does not allow a member retirement credit for all years creditable under this retirement system, the state annuity shall be computed on the basis of all years of creditable service under the retirement system as prescribed herein and then divided into two (2) parts and paid as follows:
(1) The payment to the local retirement system shall be based only on the number of years service creditable on which benefits are computed under the local retirement fund; and
(2) The payment based upon the additional years of service creditable under the retirement system shall be paid directly to the retired member of the local retirement fund.