(1)Each year prior to the
effective date of an annual increase, the board shall determine the amount of the
annual increase to be paid, if any. In no event shall the board award an annual
increase to any division that exceeds the amount provided for in this section.
(1.5) For the years 2018 and 2019, the annual increase awarded shall be zero
percent.
(2)The maximum annual increase that may be awarded by the board
pursuant to section 24-51-1001 (3) shall be determined based on annual actuarial
valuations of the annual increase reserve of each division. Each year after the board
determines the annual increase amount, and prior to its effective date, a sum equal
to the net present value of the total actuarial cost of paying the annual increase to
all eligible recipients shall be
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(1) Each year prior to the
effective date of an annual increase, the board shall determine the amount of the
annual increase to be paid, if any. In no event shall the board award an annual
increase to any division that exceeds the amount provided for in this section.
(1.5) For the years 2018 and 2019, the annual increase awarded shall be zero
percent.
(2) The maximum annual increase that may be awarded by the board
pursuant to section 24-51-1001 (3) shall be determined based on annual actuarial
valuations of the annual increase reserve of each division. Each year after the board
determines the annual increase amount, and prior to its effective date, a sum equal
to the net present value of the total actuarial cost of paying the annual increase to
all eligible recipients shall be reallocated from the annual increase reserves of each
division to the retirement benefits reserve or the survivor benefits reserve, as
appropriate. All annual increase payments shall be made from the reserves used for
monthly benefit payments, and no annual increase payments shall be made from
the annual increase reserve.
(3) The annual increase reserve of each division shall contain the allocations
specified in this subsection (3). Such amounts shall be retained in the annual
increase reserve of each division until removed from that reserve pursuant to this
section. The allocations shall be as follows:
(a) A portion of the employer contribution specified in section 24-51-401 (1.7)
equal to one percent of the salaries of members who were not members, inactive
members, or retirees on December 31, 2006;
(b) A sum received in connection with purchased service credit pursuant to
section 24-51-503 (4), specified as annual increase allocation; and
(c) A proportional share of the investment income earned on the amounts
specified in paragraphs (a) and (b) of this subsection (3).
(4) An actuarial valuation shall be conducted each year for the annual
increase reserve of each division for the purposes of this section. The actuarial
valuation shall include a determination of the total market value of the assets in the
reserve and a calculation of the net present value of the actuarial liabilities
associated with providing each of the annual increases described in subsections
(4)(a), (4)(b), and (4)(c) of this section. Subject to section 24-51-1009.5, the
maximum annual increase awarded by the board shall be the lesser of the following
calculations:
(a) Subject to the maximum annual increase as adjusted pursuant to section
24-51-413, a permanent increase equal to one and one-half percent of current
benefits payable to benefit recipients then eligible for an annual increase in
accordance with section 24-51-1001 (3);
(b) Subject to the provisions of subsection (4.5) of this section, a permanent
increase of current benefits payable to benefit recipients then eligible for an annual
increase in accordance with section 24-51-1001 (3) that is equal to the average of
the annual increases determined for each month, to the nearest one-tenth of a
percent, as calculated by the United States department of labor, in the national
consumer price index for urban wage earners and clerical workers during the
calendar year preceding the increase in the benefit for the year associated with the
actuarial valuation of the annual increase reserve; or
(c) A permanent increase of current benefits payable to benefit recipients
then eligible for an annual increase in accordance with section 24-51-1001 (3) that
will exhaust ten percent of the year-end balance at market value of the annual
increase reserve.
(4.5) For the year 2010, the association shall use the average of the annual
increases determined for each month, to the nearest one-tenth of a percent, as
calculated by the United States department of labor, in the national consumer price
index for urban wage earners and clerical workers for each of the months in the
2009 calendar year.
(5) No calculation made pursuant to this section shall cause a reduction in
current benefits of eligible benefit recipients.