(1) The purpose of this section is to provide cost-of-living adjustments to the monthly benefits payable to all retired members of state-supported retirement systems.

(2) The terms used in this section are defined as follows:

(a) "Standard benefit" means the monthly benefit calculated in accordance with s. 121.091 as for normal retirement, early retirement, or disability retirement, and adjusted, if an optional form of benefit payment was elected by the member, in the same ratio as his or her original benefit payment was adjusted. Such determination shall be made on the assumptions that: 1. Creditable service is the number of years of service for which benefits are provided by the system under which benefits are being paid; and 2. Average final compensation is the compensation base on which benefits being paid were determined.

(b) "Initial benefit" means the first monthly benefit payable to a retiree or beneficiary in accordance with the laws governing the determination of such benefit at the time of retirement or earlier death.

(3) On each July 1, commencing July 1, 1987, the benefit of each retiree and annuitant shall be adjusted as follows:

(a) For those retirees and annuitants who have never received a cost-of-living adjustment under this section, the amount of benefit payable for the 12-month period commencing on the adjustment date shall be the sum of the member's initial benefit and a percentage of the member's standard benefit, such percentage to be equal to three times the number of months the member has received an initial benefit, divided by twelve.

(b) For those retirees and annuitants who have received a cost-of-living adjustment under this section, the adjusted monthly benefit shall be the sum of the monthly benefit being received on June 30 immediately preceding the adjustment date and 3 percent of this benefit.

(4) In no event shall a retiree's or annuitant's monthly retirement benefit be reduced, by the application of this section, below the benefit he or she was receiving as of July 1, 1970, or at the date of retirement, if later, nor shall the benefit be reduced below the minimum monthly benefit provided him or her under s. 112.362.

(5) The initial benefit and standard benefit of a retiree who elected an optional form of benefit payment which provided for a percentage of the benefit to be continued to a beneficiary after his or her death shall be reduced at the death of the retiree by application of the stated percentage.

(6) The funds necessary to pay for the cost-of-living adjustment provided by this section are hereby annually appropriated from the System Trust Fund. History: s. 10, ch. 70-112; s. 8, ch. 74-302; s. 4, ch. 80-242; s. 6, ch. 81-307; s. 37, ch. 83-217; s. 11, ch. 84-266; s. 1, ch. 87-534; s. 774, ch. 95-147.