Section 26 of Chapter 32 of the General Laws is hereby amended by striking paragraph (c) and inserting the following:

(c) Upon retirement under the provisions of this subdivision, a member shall receive a retirement allowance to become effective on the date of the member’s retirement. Payments under such retirement allowance shall be made as provided for in sections twelve and thirteen and the normal yearly amount thereof shall be equal to sixty percent of the average annual rate of the member’s regular compensation during the twelve-month period of his creditable service immediately preceding the date the member’s retirement allowance becomes effective; provided further that the total amount of the allowance shall be increased by one-twelfth of three percent for each full month of service in excess of twenty years of service and prior to the last day of the month in which such member will reach the age of fifty-five; provided, further, that such retirement allowance shall in no case exceed seventy-five percent of such regular compensation; and provided, further, that if a member shall reach the member’s fifty-fifth birthday and shall not have completed such twenty years of service, the amount of his retirement allowance shall be calculated by subtracting from such normal yearly amount one-twelfth of three percent for each full month of service that the member’s service is less than twenty years. Any member retired under the provision of this subdivision who is a veteran as defined in section one shall receive an additional yearly retirement allowance of fifteen dollars for each year of creditable service or fraction thereof; provided, that the total amount of said additional retirement allowance shall not exceed three hundred dollars in any case.