Any city employe who, on or after September 16, 1940, has been employed by the city for a period of six months and who, on or subsequent to such date, shall have enlisted or been inducted into the military service of the United States in time of war, armed conflict or national emergency so proclaimed by the President or the Congress of the United States, shall have credited to his employment record, for retirement benefits, all of the time spent by him in such military service during the continuance of such war, armed conflict, or national emergency, and such payments as were heretofore or shall hereafter be required to be made during such period by such city employe into the city employes' retirement fund shall be paid into such fund by the city. Any employes who have made payments into the city employes' retirement fund, for which payments the city is liable under the provisions of this act, shall be reimbursed by the city to the full extent of such payments or be given credit towards future payments under this act.

Any member of the pension fund who is a contributor and who served in the armed forces of the United States subsequent to September 1, 1940, and who was not a member of the pension fund prior to such military service, and who commenced employment in city service after the date of release from active duty, shall be entitled to have full credit for each year or fraction thereof, not to exceed five years of such service upon his payment to the pension fund an amount equal to that which he would have paid had he been a member during the period for which he desires credit, computed with reference to the compensation he received upon entry into city service and his current percentage of salary deductions, and an additional amount as the equivalent of the contributions of the city and school district on account of such military service, which amount may be paid in a lump sum or by installments as may be approved by the board.