1. (a) A cost of living adjustment to the monthly benefit of a member of the 1925 fund, 1937 fund, or 1953 fund is determined in STEP FOUR of the following formula:

   STEP ONE: Calculate a percentage by dividing:

   1. (A) the amount of any increase in the salary of a first class officer or firefighter, whichever is applicable; by

   2. (B) the prior year's salary of a first class officer or firefighter, whichever is applicable.

      STEP TWO: Add:

   3. (A) the member's DROP frozen benefit; and

   4. (B) the amount of any prior cost of living adjustments calculated under this section.

      STEP THREE: Multiply the percentage determined under STEP ONE by the sum determined under STEP TWO.

      STEP FOUR: Add the product determined under STEP THREE to the sum determined under STEP TWO.

2. (b) A cost of living adjustment to the monthly benefit of a member of the 1977 fund is determined under the provisions of IC 36-8-8 , as applied after:

   1. (1) the member's DROP retirement date; or
   2. (2) the date the member retires because of a disability as provided under section 16.5(d) of this chapter.

As added by P.L.62-2002, SEC.5. Amended by P.L.148-2007, SEC.4.