The city council shall enact an ordinance or ordinances prescribing the conditions according to which, as of July 1 of each year, every monthly allowance payable to or on account of a member of this system whose retirement or death as a member of this system occurred prior to July 1 of the preceding year shall be increased or decreased by a percentage of the allowance then being received. Such percentage shall approximate, to the nearest one-tenth of one percent, the percentage of annual increase or decrease, if any, in the cost-of living during the whole of the preceding calendar year by reference to the current U.S. Department of Labor, Bureau of Labor Statistics' Consumer Price Index for the San Francisco-Oakland area (or the Sacramento area, in the event the Index is established for the Sacramento area), for the whole of the preceding calendar year; provided that such increase or decrease shall not exceed three percent of any allowance in any year, regardless of the percentage of change in cost-of-living; and provided further that no allowance shall be reduced below the amount payable at death or retirement.
In addition to the increase provided in the preceding paragraph, the city council shall enact an ordinance or ordinances prescribing the conditions according to which, as of July 1 of each year, every monthly allowance payable to or on account of a member of this system whose retirement or death as a member of this system occurred on or after July 1 of the preceding year shall be increased or decreased by a percentage of the allowance then being received. For each whole month of the preceding fiscal year during which a member was retired or for each whole month of the preceding fiscal year after the member's death, such percentage shall approximate one-twelfth of the percentage of annual increase or decrease (to the nearest one-tenth of one percent), if any, in the cost-of-living during the whole of the preceding calendar year by reference to the current U.S. Department of Labor, Bureau of Labor Statistics' Consumer Price Index for the San Francisco-Oakland area (or the Sacramento area, in the event the Index is established for the Sacramento area), for the whole of the preceding calendar year; provided that such increase or decrease shall not exceed three percent of any allowance in any year, regardless of the percentage of change in cost-of-living; and provided further that no allowance shall be reduced below the amount payable at death or retirement. The provisions of this paragraph shall apply only to members whose retirement or death occurred on or after July 2, 1979.
The amount of any monthly allowance payable to a survivor or beneficiary upon death of a retired person shall be the amount which would be payable as of the date of death had payment of such allowance begun on the date of retirement, and shall thereafter be adjusted in accordance with this section.
The amount of any cost-of-living increase or decrease in any year which is in excess or the maximum annual allowance adjustment of three percent provided in this section shall be accumulated from year-to-year and included in the computation of increases or decreases in succeeding years. The provisions of this paragraph shall be applied to the allowance of individual beneficiaries by classes based upon the fiscal year in which the member retired or died, so that each allowance shall have applied to it only such increase or decrease as shall have accumulated during or after the fiscal year in which the member retired or died. No allowance shall be reduced by operation of this section below the amount payable at the time or retirement.
Increases in allowances payable pursuant to this section shall be funded by contributions of the members subject to this section and contributions of the city. The individual member's contribution shall be at the rate of 6.7% of his or her contributions (excluding additional contributions under former (1989) Charter section 404). The city's contribution shall be determined by the board in accordance with its funding policy in former (1989) Charter section 385 at a rate required to fund the cost of increases under this section and former (1976) Charter section 354 not provided by member contributions. The board shall provide for transfer to members' accounts under this section of the portion of accumulated contributions under former (1976) Charter section 354 which were made by members thereunder becoming subject to this section.
The city council shall provide by ordinance for the continuation of benefits provided by former (1976) Charter section 354 for members of this system who have elected to receive the benefits provided by former (1976) Charter section 354. The provisions of said ordinance shall substantially conform to the provisions of former (1976) Charter section 175.29 and shall include the provisions of the second paragraph of this section; provided, however, that in fixing the rates for member contributions the board shall assume that all persons who are members of this system or are members of PERS and are in the employ of the city would continue to make contributions and receive benefits under former (1976) Charter section 354. (Amended June 6, 1989)