38-818

38-818. Benefit increases

A. Effective July 1 of each year, each retired member or survivor of a retired
member is entitled to receive a permanent increase in the base benefit equal to the
amount determined pursuant to this section if either:

1. The retired member or survivor of a retired member was receiving benefits on or
before July 31 of the two previous years.

2. The retired member or survivor of a retired member was fifty-five years of age
or older on July 1 of the current year and was receiving benefits on or before July 31 of
the previous year.

B. The monthly amount of a permanent increase provided by subsection A is
determined as follows:

1. Determine the excess investment earnings on the actuarial present value of
pensions in payment status.

2. Determine the actuarial present value, as of June 30 of the preceding calendar
year, of a one-half of one per cent per month increase in the amount of each pension
eligible for an increase.

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

4. From the quotient obtained in paragraph 3 of this subsection, drop any fraction.

5. Multiply the number obtained in paragraph 4 of this subsection by one-half of
one per cent.

C. The excess investment earnings of pensions in payment status are equal to the
actuarial present value of pensions in payment status multiplied by the positive
difference, if any, between the total return of the plan and nine per cent. The excess
investment earnings on pensions in payment status are zero if the total return of the
plan is less than or equal to nine per cent.

D. As used in this section, total return and the actuarial present value of
pensions in payment status are the amounts published in the annual report of the plan for
the fiscal year ending June 30 of the calendar year preceding the July 1 of the increase.

E. All excess investment earnings on pensions in payment status are available for
benefit increases as provided in this section. Any excess investment earnings on
pensions in payment status from any year which are not used for benefit adjustments for
that year are available for future benefit increases in the following years. Earnings on
the excess investment earnings on pensions in payment status account balance at the rate
of the total return as published in the annual report of the plan shall be added each
year to the excess investment earnings on pensions in payment status account balance and
shall be available for future benefit increases.

F. The maximum benefit increase under this section is limited to four per cent of
the benefit being received on the preceding June 30.