A. For a member whose membership commenced before the effective date of this amendment to this section, 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.

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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 who was eligible for an annual benefit increase pursuant to subsection A of this section 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.