Subject to the protecting local government retirement and benefits act, if the functions of a governmental unit are transferred to the county, and if all or part of the employees of the functions are transferred from the employ of a governmental unit to the employ of the county, the board of supervisors may regard for the purposes of retirement benefits as set forth in section 12a the service rendered to the governmental unit by the employees transferred as county service to the extent and under such reasonable terms and conditions as are mutually agreeable between the board of supervisors and the governing body of the governmental unit. As used in this section, "governmental unit" means a department, board, or commission of this state, or any political subdivision of this state.