Any cash and securities to the credit of the local system and held on account of persons who become members of this system shall be transferred to this system, as of the effective date of the contract. The board may make arrangements with the agency for the transfer of assets, other than an amount equal to the total member contributions, over an appropriate period following the effective date of the contract, if it finds that transfer as of the effective date is not possible without hardship to the agency because of contractual restrictions on the return of assets of
the local system held by an insurance carrier. The board shall in that case credit, as interest income, the portion of the assets transferred as is necessary to compensate the retirement fund for loss of earnings because of the delay in transfer, the amount to be determined by applying a rate that is equal to the difference between the average rate of earnings of the fund on investments made in fixed income securities during the fiscal year preceding the date of contract and the annual interest rate to the balance of the assets not transferred. The value at which the securities shall be credited to the contracting agency shall be determined by the board. In crediting transferred cash, as the contracting agency’s contributions, the board may fix the credit, by writing down the book value of securities purchased with that cash, at an amount that will result in an interest return under the securities at least equal to the current rate of interest credited to contributions. As of that date, the governing body or
head of the local system shall certify the proportion, if any, of its funds that represents the accumulated contributions of the members, and the relative shares of the members.