(a) Determination of Cost of Living Increase or Decrease. The Board, before May 1, of each year commencing with the year 1967, shall determine the percentage of the annual increase or decrease in the cost of living as of March 1, of that year from March 1, of the preceding year, as shown by the consumer price index published by the Bureau of Labor Statistics for the area in which the City is located. If any such index were not to reflect the cost of living as of a particular March 1, then the index for the closest preceding date which shall have done so shall be used. If there were to be any change in the statistical method or the components which were used in any such index from those which were used in any such index of the preceding year with which a comparison is to be made, then the Board, to the extent possible, shall adjust any such differences therein for the purpose of determining the percentage of increase or decrease in the cost of living.
(b) Adjustments to be Made in Pensions. Commencing as of July 1 of the year in which the Board shall determine the percentage of increase or decrease in the cost of living, the monthly amounts of certain pensions, as hereinafter identified and upon the conditions hereunder stated therefor, shall be increased or decreased by reason of such determined percentage of increase or decrease in the cost of living but not to exceed, however, 2% in any given year. Such determined percentage of increase or decrease in the cost of living, as so limited, shall be applied to the monthly amounts of such pensions which shall be payable prior to the applicable July 1, including any previous percentage of increase or decrease in the cost of living which had been made with respect thereto.
(c) Application of Adjustments. The percentage of increase or decrease in the cost of living first shall be applied to:
(1) Service Pensioners with Less than 25 Years Service. The pension of any Retired Member who shall retire pursuant to Section 1408, with less than 25 years of service, upon the July 1 following the date upon which he would have had 25 years of service if he had not retired prior thereto;
(2) Service Pensioners with at Least 25 Years Service. The pension of any Retired Member who shall retire pursuant to Section 1408, with 25 years of service or more upon the July 1, following the effective date of his pension;
(3) Survivor Pensions of Members with Less Than 26 Years Service. The pension of any Beneficiary or Beneficiaries which shall be granted pursuant to Section 1414(a)(5) and(6), whether by reason of the provisions thereof or of those of Section 1414(b) and (c), including any additional pension amounts payable pursuant to Section 1414(a)(7), following the death, with less than 26 years of service, of a Retired Member who had been retired pursuant to Section 1408 or of a System Member who had become eligible to retire pursuant thereto, upon the July 1, following the date upon which such Retired Member or such System Member, as the case may be, would have had 26 years of service if he, the Retired Member, had not retired prior thereto and had been alive on that date, or if he, the System Member, had been alive on that date; and
(4) Survivor Pensions of Members with at Least 26 Years Service. The pension of any Beneficiary or Beneficiaries which shall be granted pursuant to Section 1414(a)(5) or (6), whether by reason of the provisions thereof or of those of Section 1414(b) or (c), including any additional amounts payable pursuant to Section 1414(a)(7), following the death, with 26 Years of Service or more, of a Retired Member who had been retired pursuant to Section 1408 or of a System Member who had become eligible to retire pursuant thereto, upon the July 1, following the effective date of the pension of such Beneficiary or Beneficiaries.
(5) Certain Survivor Pension Beneficiaries. The pension which shall become payable to any minor child or children or dependent child or children, whenever any qualified surviving spouse or reinstated qualified surviving spouse shall cease to be such, shall commence in the same monthly amount which then would have been payable if such pension had become effective upon the date following the date of death of the System Member or Retired Member and thereafter it shall be adjusted as otherwise provided in this section. The pension which shall become payable to any reinstated qualified surviving spouse, as reinstated pursuant to Section 1414(a)(8), shall commence in the same monthly amount which then would have been payable if she never had ceased to be a qualified surviving spouse and thereafter it shall be adjusted as otherwise provided in this section. The pension which shall become payable to any reinstated dependent parent or parents, as reinstated pursuant to Section 1414(c), shall commence in the same monthly amount which then would have been payable if he or she or each of them never had ceased to be a dependent parent and thereafter it shall be adjusted as otherwise provided in this section.
(6) Limitation on Reductions. The amount of any pension referred to in (1), (2), (3), (4) or (5) of this subsection never shall be reduced, by reason of the application thereto of this section, to an amount less than the amount thereof payable pursuant to the provisions of this Tier 2 other than those of this section.
(d) Carryover of Excess Adjustments. If the percentage of increase or decrease in the cost of living in any year, as determined by the Board, were to exceed 2% as compared with the cost of living as of March 1, of the preceding year, the percentage of increase or decrease in the cost of living in excess of 2% shall be carried over and added to or subtracted from the percentage of increase or decrease in the cost of living in the succeeding year, and such procedure shall be complied with from year to year.