(a) In the event that a State-administered defined contribution service award program provides for prior service contributions, each volunteer fire company or volunteer fire department for which the program is adopted shall identify on the list prepared pursuant to section 154.6(b) of this Part those participants who are entitled to one or more prior service contributions and the number of years for which each participant is entitled to such prior service contributions. Any participant who is denied a prior service contribution for one or more years may appeal to the governing board at the same time, in the same manner, and with like effect as provided in section 154.6(d) of this Part. Except as provided in subdivision (b) or (d) of this section, prior service contributions shall be paid to the administrator in a single lump sum.

(b) In the case of a State-administered defined contribution volunteer firefighter service award program that is initially established as a State-administered defined contribution volunteer firefighter service award program, the governing board of the sponsor may elect to pay service contributions over the five-year period beginning with the calendar year in which the program first takes effect; provided, however, that if a volunteer firefighter first qualifies for a year of firefighting service for a calendar year later than the first calendar year in which the program first takes effect, and thereby becomes a participant entitled to prior service credit, then any prior service contribution attributable to such prior service credit shall be paid over the five-year period beginning with the calendar year for which the volunteer firefighter first qualified for a year of firefighting service. Where such an election is made, the first annual installment shall be paid to the administrator at the same time that the first contribution on behalf of a participant is made pursuant to section 154.6 of this Part. Each subsequent annual installment shall be paid in each of the four years immediately succeeding the year in which the first installment is paid, together with interest at the rate determined pursuant to subdivision (c) of this section on the unpaid balance of the prior service contribution as of the date of such payment; provided, however, that in the event that the administrator notifies the sponsor that a participant has been determined eligible for a distribution of a service award prior to the payment of the fifth annual installment, the governing board of the sponsor shall cause payment to be made to the administrator of an unscheduled prior service contribution within 30 days of receiving such notice. The unscheduled prior service contribution shall equal the unpaid balance of the participant's prior service contribution plus interest at the rate determined pursuant to subdivision (c) of this section on such unpaid balance.

(c) On or before March 31st of each year the administrator shall determine the rate of interest to be paid on the unpaid balance of prior service contributions. The rate of interest shall equal the rate of return on program assets during the preceding calendar year. The administrator shall notify sponsors of the rate of interest by inclusion in, or enclosure with, the report required by section 154.12(a) of this Part.

(d) Notwithstanding the provisions of subdivisions (a) and (b) of this section, if, as of the effective date of the conversion of the locally-administered defined contribution volunteer firefighter service award program into a State-administered defined contribution volunteer firefighter service award program, the governing board of a sponsor has not approved a certified list of volunteer firefighters qualified for credit for a year of firefighting service rendered during the preceding calendar year which identifies those participants who, by virtue of earning such credit, became entitled to one or more prior service contributions in substantial compliance with the procedures referred to in subdivision (a) of this section, the list prepared pursuant to section 154.6(g) of this Part shall identify such participants and the number of years for which each participant is entitled to prior service contributions. A participant who is denied a prior service contribution for one or more years may appeal to the governing board of the sponsor at the same time, in the same manner, and with like effect as provided in section 154.6(d) of this Part. Payment of prior service contributions shall be made in a single lump sum or in installment payments as provided in subdivision (b) of this section.

(e) If, as of the effective date of the conversion of a locally administered defined contribution volunteer firefighter service award program into a State-administered defined contribution volunteer firefighter service award program, the governing board of a sponsor has approved a certified list of volunteer firefighters qualified for credit for a year of firefighting service rendered during the preceding calendar year which identifies those participants who, by virtue of earning such credit, became entitled to one or more prior service contributions in substantial compliance with the procedures referred to in subdivision (a) of this section, the sponsor shall pay such prior service contributions in a single lump sum or in installment payments as provided in subdivision (b) of this section.