38-767

38-767. Benefit increases

A. Effective July 1 of each year, each retired member or beneficiary of a retired
member is entitled to receive a permanent benefit increase in the base benefit equal to
the amount determined in subsection D of this section if the retired member or
beneficiary of a retired member was receiving benefits on or before July 31 of the
previous calendar year. The annual permanent benefit increases shall be paid on a monthly
basis. The benefit increase shall commence on July 1.

B. The total amount of the percentage increase provided in subsection A of this
section shall not exceed four per cent in aggregate for all persons eligible for an
increase. The percentage payable from excess investment earnings shall be determined as
follows:

1. Determine any excess investment earnings account balance available.

2. Determine the total excess investment earnings as provided in subsection C of
this section.

3. Add the amount determined in paragraph 1 of this subsection to the amount
determined in paragraph 2 of this subsection.

4. Determine one per cent of the actuarial present value of benefits for retired
members and beneficiaries as of June 30 of the year prior to the year for which an
increase is being granted.

5. Divide the amount determined in paragraph 3 of this subsection by the amount
determined in paragraph 4 of this subsection. If the quotient is equal to or more than
four, the percentage increase payable from excess investment earnings on accounts
associated with those persons eligible for an annual benefit increase pursuant to
subsection A of this section is four per cent. If the quotient is one or more but less
than four, the percentage increase payable from excess investment earnings on accounts
associated with those persons eligible for an annual benefit increase pursuant to
subsection A of this section is that per cent rounded to the nearest tenth of a per cent.
If the quotient is less than one, no benefit increases shall be granted.

C. The excess investment earnings on accounts associated with those persons
eligible for an annual benefit increase pursuant to subsection A of this section are
equal to the actuarial present value of benefits for all retired members and
beneficiaries as of June 30 of the year prior to the year for which an increase is being
granted multiplied by the positive difference, if any, between the yield rate on the
actuarial value of ASRS assets for the fiscal year that ended June 30 of the year prior
to the year for which an increase is being granted and eight per cent. The excess
investment earnings on accounts associated with those persons eligible for an annual
benefit increase pursuant to subsection A of this section are zero if the yield rate on
ASRS assets is less than or equal to eight per cent.

D. The permanent benefit increase for each person entitled to receive an increase
pursuant to subsection A of this section shall be determined based on years of credited
service as follows:

1. Multiply the percentage determined in subsection B, paragraph 5 of this section
by the actuarial present value of benefits for retired members and beneficiaries as of
June 30 of the year prior to the year for which an increase is being granted.

2. Determine the actuarial present value of a one dollar per year of credited
service annual increase in the base benefit amounts as of June 30 of the year prior to
the year for which an increase is being granted, received by all persons entitled to
receive an increase pursuant to subsection A of this section.

3. Divide the amount determined in paragraph 1 of this subsection by the amount
determined in paragraph 2 of this subsection.

4. Multiply the amount determined in paragraph 3 of this subsection by the number
of years of credited service for each retired member and the number of years of credited
service earned by a retired member for each beneficiary entitled to receive an increase
pursuant to subsection A of this section.

E. Any excess investment earnings on accounts associated with those persons
eligible for an annual benefit increase pursuant to subsection A of this section from any
year that are not used for benefit adjustments for that year are available for future
benefit increases in the following years.

F. Monies available for future benefit increases shall earn interest at a rate of
eight per cent per year. This interest shall be used to pay the additional benefit
increases provided for in subsection G of this section.

G. In addition to a benefit increase pursuant to subsection A of this section, if a
retired member had more than ten years of credited service, the retired member or
beneficiary of the retired member is entitled to receive a benefit increase based on the
number of years following retirement as follows:

1. At least five years but less than ten years, a monthly benefit increase equal to
the amount determined in subsection H of this section.

2. At least ten years but less than fifteen years, a monthly benefit increase equal
to two times the amount determined in subsection H of this section.

3. At least fifteen years but less than twenty years, a monthly benefit increase
equal to three times the amount determined in subsection H of this section.

4. At least twenty years but less than twenty-five years, a monthly benefit
increase equal to four times the amount determined in subsection H of this section.

5. At least twenty-five years but less than thirty years, a monthly benefit
increase equal to five times the amount determined in subsection H of this section.

6. At least thirty years, a monthly benefit increase equal to six times the amount
determined in subsection H of this section.

H. The amount of the monthly benefit increase under subsection G of this section
for a retired member or beneficiary of a retired member who is entitled to the increase
when at least five years but less than ten years have elapsed since the retired member's
retirement date is equal to the amount obtained by dividing the amount of interest
credited pursuant to subsection F of this section by the amount that equals the sum of:

1. The actuarial present value, as of June 30 of the year prior to the year for
which the increase is granted, of a benefit increase of one dollar per month for the
retired members and beneficiaries of retired members who are eligible for an increase
under subsection G of this section and for whom at least five years but less than ten
years have elapsed since the retired members' retirement dates.

2. The actuarial present value, as of June 30 of the year prior to the year for
which the increase is granted, of a benefit increase of two dollars per month for the
retired members and beneficiaries of retired members who are eligible for an increase
under subsection G of this section and for whom at least ten years but less than fifteen
years have elapsed since the retired members' retirement dates.

3. The actuarial present value, as of June 30 of the year prior to the year for
which the increase is granted, of a benefit increase of three dollars per month for the
retired members and beneficiaries of retired members who are eligible for an increase
under subsection G of this section and for whom at least fifteen years but less than
twenty years have elapsed since the retired members' retirement dates.

4. The actuarial present value, as of June 30 of the year prior to the year for
which the increase is granted, of a benefit increase of four dollars per month for the
retired members and beneficiaries of retired members who are eligible for an increase
under subsection G of this section and for whom at least twenty years but less than
twenty-five years have elapsed since the retired members' retirement dates.

5. The actuarial present value, as of June 30 of the year prior to the year for
which the increase is granted, of a benefit increase of five dollars per month for the
retired members and beneficiaries of retired members who are eligible for an increase
under subsection G of this section and for whom at least twenty-five years but less than
thirty years have elapsed since the retired members' retirement dates.

6. The actuarial present value, as of June 30 of the year prior to the year for
which the increase is granted, of a benefit increase of six dollars per month for the
retired members and beneficiaries of retired members who are eligible for an increase
under subsection G of this section and for whom at least thirty years have elapsed since
the retired members' retirement dates.

I. A member of the defined contribution program administered by ASRS is only
eligible for the benefit increases pursuant to this section if the member elects to
transfer irrevocably from the defined contribution program administered by ASRS to the
defined benefit program established by this article.

J. The cost of the benefit increases granted pursuant to this section shall be
added to the existing liabilities of ASRS.

K. As used in this section, the actuarial present value of benefits for retired
members and beneficiaries does not include the value of benefits provided pursuant to
section 38-783.