(a) The Comptroller may, once each year following the retirement of a member on a disability allowance, and upon the beneficiary's application shall, require such disability beneficiary to undergo a medical examination. No such examination may be required until one year following the final determination granting disability retirement. Such examination shall be made at a place mutually agreed upon by the Comptroller and such beneficiary. In the event that any such disability beneficiary shall refuse to submit to a medical examination, the retirement allowance shall be discontinued until the member submits to a medical examination. If such refusal shall continue for one year, all pension rights shall be forfeited.

(b) Following such examination, or examinations, the Comptroller shall render a determination based upon the report of the medical board. Where the Comptroller determines that a beneficiary who has retired from a competitive class position is no longer incapacitated for the performance of gainful employment, the Comptroller shall certify to the applicable civil service department or commission, that the beneficiary is a preferred eligible to be placed upon the appropriate eligible list or lists, if any. Disability payments shall continue until such time as the beneficiary is first offered a position in public service at a salary grade equal to or exceeding that of the position from which the beneficiary had retired.

(c) In the event that a beneficiary had not retired from a competitive class position, or in the event that there exists no eligible list which encompasses the competitive class position from which he or she had retired, disability payments shall cease one calendar year from the date of the Comptroller's redetermination, and the beneficiary shall, if he or she had been vested at the time of retirement, be restored to membership in the New York State Employee's Retirement System.