Credit for prior service shall be granted to each member who was employed by the state, but not by the university, at the time of becoming a member. Credit for prior service shall be granted to each state member who, on or before the effective date of his or her retirement under this system, becomes entitled to be credited with five years or more of current service rendered as a state member.

The status under this system of each state member who qualifies for credit for prior service under this section shall be adjusted to what it would have been if the prior service had been credited to the member at the date he or she became a member of this system.