(1) The member's accumulated contributions and, if no pension is payable under section 88-85, an amount equal to fifty per cent of the compensation earned by the member during the year immediately preceding the member's death if the member had at least one year but not more than ten full years of credited service, which amount shall increase by five per cent for each full year of service in excess of ten years, to a maximum of one hundred per cent of the compensation; provided that if the member had at least one year of credited service, the amount, together with the member's accumulated contributions shall not be less than one hundred per cent of the compensation; or

(2) If the member had ten or more years of credited service at the time of death in service, and the death occurred after June 30, 1988, the member's designated beneficiary may elect to receive in lieu of any other payment provided in this section, the allowance that would have been payable as if the member had retired the day prior to death under option 3 of section 88-83 and computed on the basis of section 88-76; or

(3) If the member was eligible for service retirement at the time of death in service, the member's designated beneficiary may elect to receive in lieu of any other payment provided in this section, the allowance that would have been payable as if the member had retired the day prior to death and had elected to receive a retirement allowance under option 2 of section 88-83.

(1) To the surviving spouse or reciprocal beneficiary, a benefit as specified under subsection (a)(1), (2), or (3);

(2) To the deceased member's dependent child, or children under age eighteen if there is no surviving spouse or reciprocal beneficiary, an equally divided benefit as specified under subsection (a)(1); or

(3) To the deceased member's estate, if there is no surviving spouse or reciprocal beneficiary or dependent child or children, a benefit as specified under subsection (a)(1).