1. (A) As of the end of each calendar year, the increase in the ratio of the Consumer Price Index to the index as of the prior December thirty-first must be determined.

2. (B)

   1. (1) If the Consumer Price Index as determined pursuant to subsection (A) of this section increases by no more than two percent, the retirement allowance, inclusive of the supplemental allowances payable under the provisions of Sections 9-1-1910, 9-1-1920, and 9-1-1930, of each beneficiary in receipt of an allowance must be increased by a percentage equal to the increase in the index.

   2. (2) If the Consumer Price Index as determined pursuant to subsection (A) of this section increases by more than two percent, then:

      1. (a) the retirement allowance of each beneficiary in receipt of an allowance, inclusive of the supplemental allowances payable under the provisions of Section 9-1-1910, 9-1-1920, and 9-1-1930, must be increased by two percent; and

      2. (b) the retirement allowance may be further increased by the board beyond two percent up to the lesser of the total percentage increase in the Consumer Price Index or four percent, but only to the extent all of the following conditions are met:

         1. (i) the amortization period for unfunded liability as reported in the annual valuation by the actuary for the most recently concluded fiscal year is at twenty-five years or below;
         2. (ii) the estimated funded ratio in the current year, after an increase pursuant to this subitem, does not decrease from the actuary's reported funded ratio for the most recently completed fiscal year;
         3. (iii) the estimated amortization period in the current year, after the increase pursuant to this subitem, is reduced by at least one year from that reported by the actuary for the most recently completed fiscal year; and
         4. (iv) no increased employer contribution is required to support the increase pursuant to this subitem.
3. (C) The increase in retirement allowances commences the July first immediately following the December thirty-first that the increase in ratio was determined, and all increases in retirement allowances must be granted to these beneficiaries in receipt of a retirement allowance on July first immediately preceding the effective date of the increase. Any increase in allowance granted pursuant to this section must be included in the determination of any subsequent increases, irrespective of any subsequent decrease in the Consumer Price Index.
4. (D) The allowance of a surviving annuitant of a beneficiary whose allowance is increased under this section, when and if payable, must be increased by the same percent.
5. (E) For purposes of this section, "Consumer Price Index" means the Consumer Price Index for Wage Earners and Clerical Workers, as published by the United States Department of Labor, Bureau of Labor Statistics.

HISTORY: 1962 Code Section 61-128; 1970 (56) 1939; 1980 Act No. 407, Section 7; 1982 Act No. 368, Section 1; 1984 Act No. 382, Section 1; 1986 Act No. 309 Section 7, eff February 4, 1986; 2001 Act No. 1, Part II, Section 2A6, eff January 1, 2001; 2005 Act No. 153, Pt II, Section 8, eff July 1, 2005; 2008 Act No. 311, Section 1, eff June 4, 2008.