(1) Except as provided in RCW
41.35.060, no retiree under the provisions of plan 2 shall be eligible to receive such retiree's monthly retirement allowance if he or she is employed in an eligible position as defined in RCW
41.35.010,
41.40.010,
41.37.010, or
41.32.010, or as a law enforcement officer or firefighter as defined in RCW
41.26.030, or in a position covered by annuity and retirement income plans offered by institutions of higher education pursuant to RCW
28B.10.400, except that a retiree who ends his or her membership in the retirement system pursuant to RCW
41.40.023(3)(b) is not subject to this section if the retiree's only employment is as an elective official.
(2) If a retiree's benefits have been suspended under this section, his or her benefits shall be reinstated when the retiree terminates the employment that caused his or her benefits to be suspended. Upon reinstatement, the retiree's benefits shall be actuarially recomputed pursuant to the rules adopted by the department.
(3) The department shall adopt rules implementing this section.