1. Provided that the retirement system shall remain actuarially sound, each of the following persons may receive, in addition to such person's base pension, a cost-of-living adjustment in an amount not to exceed three percent of such person's base pension during any one year:
(1) Every Tier I member who is retired and receiving a base pension from the retirement system; and
(2) Every Tier I surviving spouse who is receiving a base pension from the retirement system.
2. Provided that the retirement system shall remain actuarially sound, each of the following persons may receive, in addition to such person's base pension, a cost-of-living adjustment in an amount not to exceed three percent of such person's base pension during any one year as follows:
(1) Every Tier II member who retired with at least thirty-two years of creditable service shall be eligible in the year following retirement; and
(2) Every Tier II member who retired under subsection 1 of section 86.1151 with less than thirty-two years of creditable service shall be eligible in the year following the year in which they would have attained thirty-two years of creditable service had such member remained in active service; and
(3) Every Tier II member who retired under section 86.1180 shall be eligible in the year following retirement; and
(4) Every Tier II member who retired under section 86.1200 shall be eligible in the earlier of the year following the fifth year after retirement or the year following the year in which they would have attained thirty-two years of creditable service had such member remained in active service; and
(5) Every Tier II member who retired under subsection 3 of section 86.1151 shall be eligible in the year following the fifth year after retirement; and
(6) (a) Every Tier II surviving spouse of a member who, at the member's death, was receiving benefits including cost-of-living adjustments shall be eligible in the year following the most recent year when the decedent received a cost-of-living adjustment; and
(b) Every Tier II surviving spouse of a member who, at the member's death, was receiving benefits but who was not yet eligible for cost-of-living adjustments shall be eligible in the year when the decedent member would have become eligible had such decedent survived; and
(c) Every Tier II surviving spouse entitled to the benefit provided in subsection 1 of section 86.1260 shall be eligible in the year following the year of the member's death; and
(d) Every Tier II surviving spouse of a member who died with less than twenty-seven years of creditable service, entitled to benefits provided in subsection 1 of section 86.1240 , and who is not eligible for the benefit provided in subsection 1 of section 86.1260 , shall be eligible in the year following the fifth year after the member's death; and
(e) Every Tier II surviving spouse of a member who died with twenty-seven or more years of creditable service, entitled to benefits provided in subsection 1 of section 86.1240 , and who is not eligible for the benefit provided in subsection 1 of section 86.1260 , shall be eligible the later of the year following the year of the member's death or the year following the year in which the member would have attained thirty-two years of creditable service had such member remained in active service.
3. Provided that the retirement system shall remain actuarially sound, every child who, under subsection 2 of section 86.1250 , is receiving the benefit, or a portion thereof, which would be payable to a surviving spouse of the member who was such child's parent, may receive each year such cost-of-living adjustment on such benefit as would have been payable on such benefit, or portion thereof, to such surviving spouse if living.
4. Upon the death of a Tier I member who has been retired and receiving a pension and who dies after September 28, 1987, the surviving spouse of such member entitled to receive a base pension under section 86.1240 or children of such member entitled to receive a base pension under subsection 2 of section 86.1250 shall receive an immediate percentage cost-of-living adjustment to their respective base pension equal to the total percentage cost-of-living adjustments received during such member's lifetime under this section, except that the adjustment provided by this subsection shall not be made to a base pension calculated under either subdivision (1) or paragraph (b) of subdivision (2) of subsection 2 of section 86.1240 , either for a surviving spouse or for a child or children entitled to a base pension measured by the pension to which a qualified surviving spouse would be entitled, wherein such base pension is determined by a percentage of the amount being received by the deceased member at death.
5. Upon the death of a Tier II member who has been retired and receiving a pension, the surviving spouse of such member entitled to receive a base pension under section 86.1240 or children of such member entitled to receive a base pension under subsection 2 of section 86.1250 shall receive an immediate percentage cost-of-living adjustment to their respective base pension equal to the total percentage cost-of-living adjustments received during such member's lifetime under this section, except that the adjustment provided by this subsection shall not apply for any surviving spouse, or for a child or children entitled to benefits which would be received by a qualified surviving spouse, receiving a benefit pursuant to an election made under subdivision (1) of subsection 2 of section 86.1151 .
6. For purposes of this section, the term "base pension" shall mean:
(1) For a member, the pension computed under the provisions of the law as of the date of retirement without regard to cost-of-living adjustments, as adjusted, if applicable, for any election made under subdivision (1) of subsection 2 of section 86.1151 or section 86.1210 , but in all events not including any supplemental benefit under section 86.1230 or section 86.1231 ;
(2) For a surviving spouse, the base pension calculated for such spouse in accordance with the provisions of section 86.1240 or subdivision (3) of subsection 2 of section 86.1151 , including any compensation as a consultant to which such surviving spouse is entitled under said section in lieu of a pension thereunder, but not including any supplemental benefit under section 86.1230 or section 86.1231 ; and
(3) For a member's surviving child who is entitled to receive part or all of the pension which would be received by the surviving spouse, if living, the base pension calculated for such surviving spouse in accordance with the provisions of section 86.1240 or subdivision (3) of subsection 2 of section 86.1151 , including any compensation as a consultant to which such spouse would be entitled under said section, if living, divided by the number of surviving children entitled to share in such pension under subsection 2 of section 86.1250 .
7. The cost-of-living adjustment shall be an increase or decrease computed on the base pension amount by the retirement board in an amount that the board, in its discretion, determines to be satisfactory, but in no event shall the adjustment be more than three percent or reduce the pension to an amount less than the base pension. In determining and granting the cost-of-living adjustments, the retirement board shall adopt such rules and regulations as may be necessary to effectuate the purposes of this section, including provisions for the manner of computation of such adjustments and the effective dates thereof. The retirement board shall provide for such adjustments to be determined once each year and granted on a date or dates to be chosen by the board, and may apply such adjustments in full to eligible members as provided in subsections 1 and 2 of this section who have retired during the year prior to such adjustments but who have not been retired for one full year and to the surviving spouse or applicable children of a member who has died during the year prior to such adjustments.
8. The determination of whether the retirement system will remain actuarially sound shall be made at the time any cost-of-living adjustment is granted. If at any time the retirement system ceases to be actuarially sound, pension payments shall continue as adjusted by increases theretofore granted. A member of the retirement board shall have no personal liability for granting increases under this section if that retirement board member in good faith relied and acted upon advice of a qualified actuary that the retirement system would remain actuarially sound.
9. If any benefit under subsection 1 of section 86.1250 on August 27, 2005, would be reduced by application of this section, such benefit shall continue thereafter without reduction, but any benefit so continued shall terminate at the time prescribed in subsection 1 of section 86.1250 .