Cost-of-living adjustment of benefits.

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

(2) As used in this section, “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) Commencing July 1, 1987, the benefit of each retiree and annuitant whose effective retirement date is before July 1, 2011, shall be adjusted annually on July 1 as follows:

(a) For those retirees and annuitants who have never received a cost-of-living adjustment under this section, the amount of the monthly benefit payable for the 12-month period commencing on the adjustment date shall be the amount of the member’s initial benefit plus an amount equal to a percentage of the member’s initial benefit; this percentage is derived by dividing the number of months the member has received an initial benefit by 12, and multiplying the result by 3.

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

(4) For members whose effective retirement date is on or after July 1, 2011, the benefit of each retiree and annuitant shall be adjusted annually on July 1 as follows:

(a) For those retirees and annuitants who have never received a cost-of-living adjustment under this subsection, the amount of the monthly benefit payable for the 12-month period commencing on the adjustment date shall be the amount of the member’s initial benefit plus an amount equal to a percentage of the member’s initial benefit. This percentage is derived by dividing the number of months the member has received an initial benefit by 12, and multiplying the result by the factor calculated pursuant to paragraph (c).

(b) For those retirees and annuitants who have received a cost-of-living adjustment under this subsection, the adjusted monthly benefit shall be the amount of the monthly benefit being received on June 30 immediately preceding the adjustment date plus an amount determined by multiplying the benefit by the factor calculated pursuant to paragraph (c).

(c) The department shall calculate a cost-of-living factor for each retiree and beneficiary retiring on or after July 1, 2011. This factor shall equal the product of 3 percent multiplied by the quotient of the sum of the member’s service credit earned for service before July 1, 2011, divided by the sum of the member’s total service credit earned.

(5)(a) Commencing July 1, 2026, and in lieu of any annual adjustment authorized in paragraph (4)(b) occurring after the fifth anniversary of retirement of an eligible Special Risk Class member whose effective retirement date is on or after July 1, 2011, the adjusted monthly benefit of each eligible Special Risk Class retiree and annuitant shall be the amount of the monthly benefit being received on June 30 immediately preceding the adjustment date plus the greater of the amount determined by multiplying the benefit by the factor calculated pursuant to paragraph (4)(c) or the amount equal to 1.5 percent of this benefit.

(b) For purposes of this subsection, the term “eligible Special Risk Class retiree” means a retiree:

1. Initially enrolled in the Florida Retirement System prior to July 1, 2011, who has completed at least 72 calendar months of creditable service as a Special Risk Class member; or

2. Initially enrolled in the Florida Retirement System on or after July 1, 2011, who has completed at least 96 calendar months of creditable service as a Special Risk Class member.

(6) Subject to the availability of funding and the Legislature enacting sufficient employer contributions specifically for the purpose of funding the expiration of the cost-of-living adjustment specified in subsection (4), in accordance with s. 14, Art. X of the State Constitution, the cost-of-living adjustment formula provided for in subsection (4) shall expire effective June 30, 2016, and the benefit of each retiree and annuitant shall be adjusted on each July 1 thereafter, as provided in subsection (3).

(7) 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.

(8) The initial 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.

(9) The funds necessary to pay for the cost-of-living adjustment provided by this section are hereby annually appropriated from the System Trust Fund.

(10) The purpose of this subsection is to establish a supplemental cost-of-living adjustment for certain retirees and beneficiaries who receive monthly retirement benefits under the provisions of this chapter and the existing systems consolidated therein, s. 112.05 for certain state officers and employees, and s. 238.171 for certain elderly incapacitated teachers.

(a) On July 1, 1996, each such retiree retiring prior to July 1, 1976, and each annuitant of such a retiree, who had 25 or more years of service, who is neither receiving nor eligible to receive social security benefits, and whose monthly benefit as of July 1, 1996, is less than $1,000, shall, upon application to the administrator, receive a supplemental cost-of-living adjustment. Such supplemental cost-of-living adjustment shall be applied by adjusting the retiree’s or annuitant’s monthly benefit to an amount equal to the sum of the monthly benefit being received on July 1, 1996, plus a percentage of the July 1, 1996, benefit. This percentage shall equal the product of 1 percent multiplied by the number of complete years that have elapsed between the member’s date of retirement and July 1, 1996. However, if the supplemental cost-of-living adjustment plus the July 1, 1996, monthly benefit would exceed $1,000, the adjustment shall be reduced to an amount which would result in a monthly benefit equal to $1,000.

(b) Application for the supplemental cost-of-living adjustment provided by this subsection shall include certification by the retiree or annuitant that he or she is not receiving, and is not eligible to receive, social security benefits and shall include written authorization for the department to have access to information from the Social Security Administration concerning his or her entitlement to, or eligibility for, social security benefits. Such supplemental cost-of-living adjustment shall not be paid unless and until the application requirements of this paragraph are met.