(a) On July 1, 1986, and on July first of each subsequent year the State Retirement Commission shall adjust the retirement allowance of each member of the Municipal Employees’ Retirement Fund and any annuitant who is receiving benefits under the provisions of this part to include a cost of living increase. There shall be an annual actuarial determination of the increase by determining the annual yield on the assets of the fund. In determining the yield, the actuary shall use an adjusted asset value, such that the market values of assets are adjusted to recognize a portion of realized and unrealized gains or losses each year until fully recognized. The amount of the increase, as a percentage of retirement allowance, shall be the excess of the annual yield over a six per cent yield, provided no increase granted under the provisions of this section shall be less than three per cent nor more than five per cent. Each such member shall receive the increases beginning on the first July first following the member’s sixty-fifth birthday. Each such annuitant shall receive the increases beginning on the first July first following the date the deceased member would have reached the age of sixty-five. Any member who retired for disability under the provisions of section 7-432 shall receive the increases beginning July 1, 1986.

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(b) (1) Notwithstanding any provision of the general statutes:

(A) Each member of the Municipal Employees’ Retirement Fund who retires prior to January 1, 2002, and has not attained age sixty-five shall receive on July 1, 2002, and on July first of each subsequent year a cost of living increase equal to two and one-half per cent. In the event that a member who retires prior to January 1, 2002, becomes deceased, such cost of living increase shall be applied to the allowance of the annuitant, if any. The cost of living increase provided for in this subsection shall continue until the July first following the member’s sixty-fifth birthday, at which point the formula set forth in subsection (a) of this section shall become operative;

(B) Each member of the Municipal Employees’ Retirement Fund who retires on or after January 1, 2002, and prior to July 1, 2025, shall receive a cost of living increase beginning on the first July first following such member’s retirement date and on each subsequent July first. Such increase shall be not less than two and one-half per cent and not more than six per cent, based upon the following formula: Sixty per cent of the annual increase in the consumer price index for urban wage earners and clerical workers for the immediately preceding twelve-month period up to six per cent, plus seventy-five per cent of the annual increase in such index for the same period over six per cent. In the event a member who retires on or after January 1, 2002, and prior to July 1, 2025, becomes deceased, such cost of living adjustment shall be applied to the allowance of the annuitant, if any;

(C) Each member of the Municipal Employees’ Retirement Fund who retires on or after July 1, 2025, and prior to July 1, 2026, shall receive a cost of living adjustment beginning on the first July first following the completion of twelve months of retirement and on each subsequent July first. Such increase shall be not less than two per cent and not more than seven and one-half per cent, based upon the following formula: Sixty per cent of the annual increase in the consumer price index for urban wage earners and clerical workers for the immediately preceding twelve-month period up to six per cent, plus seventy-five per cent of the annual increase in such index for the same period over six per cent. In the event a member who retires on or after January 1, 2025, and prior to July 1, 2026, becomes deceased, such cost of living adjustment shall be applied to the allowance of the annuitant, if any;

(D) Each member of the Municipal Employees’ Retirement Fund who retires on or after July 1, 2026, and prior to July 1, 2027, shall receive a cost of living adjustment beginning on the first July first following the completion of twelve months of retirement and on each subsequent July first. Such increase shall be not less than one and one-half per cent and not more than seven and one-half per cent, based upon the following formula: Sixty per cent of the annual increase in the consumer price index for urban wage earners and clerical workers for the immediately preceding twelve-month period up to six per cent, plus seventy-five per cent of the annual increase in such index for the same period over six per cent. In the event a member who retires on or after January 1, 2026, and prior to July 1, 2027, becomes deceased, such cost of living adjustment shall be applied to the allowance of the annuitant, if any;

(E) Each member of the Municipal Employees’ Retirement Fund who retires on or after July 1, 2027, and prior to July 1, 2028, shall receive a cost of living adjustment beginning on the first July first following the completion of twelve months of retirement and on each subsequent July first. Such increase shall be not less than one per cent and not more than seven and one-half per cent, based upon the following formula: Sixty per cent of the annual increase in the consumer price index for urban wage earners and clerical workers for the immediately preceding twelve-month period up to six per cent, plus seventy-five per cent of the annual increase in such index for the same period over six per cent. In the event a member who retires on or after January 1, 2027, and prior to July 1, 2028, becomes deceased, such cost of living adjustment shall be applied to the allowance of the annuitant, if any;

(F) Each member of the Municipal Employees’ Retirement Fund who retires on or after July 1, 2028, and prior to July 1, 2029, shall receive a cost of living adjustment beginning on the first July first following the completion of twelve months of retirement and on each subsequent July first. Such increase shall be not less than one-half per cent and not more than seven and one-half per cent, based upon the following formula: Sixty per cent of the annual increase in the consumer price index for urban wage earners and clerical workers for the immediately preceding twelve-month period up to six per cent, plus seventy-five per cent of the annual increase in such index for the same period over six per cent. In the event a member who retires on or after January 1, 2028, and prior to July 1, 2029, becomes deceased, such cost of living adjustment shall be applied to the allowance of the annuitant, if any;

(G) Each member of the Municipal Employees’ Retirement Fund who retires on or after July 1, 2029, shall receive a cost of living adjustment beginning on the first July first following the completion of twelve months of retirement and on each subsequent July first. If the national consumer price index for urban wage earners and clerical workers increases by two per cent or less for the twelve-month period immediately preceding any such adjustment, such adjustment shall equal the actual percentage change in such index. If the national consumer price index for urban wage earners and clerical workers increases by more than two per cent for the twelve-month period immediately preceding any such adjustment, such adjustment shall be equal to the higher of (1) two per cent, or (2) sixty per cent of the amount of such increase for the first six per cent plus seventy-five per cent of the amount of such increase over six per cent, provided any such adjustment shall not exceed seven and one-half per cent. In the event a member who retires on or after July 1, 2029, becomes deceased, such cost of living adjustment shall be applied to the allowance of the annuitant, if any.

(2) The provisions of this subsection do not apply to members who retired under the provisions of section 7-432.