§1549.  Cost-of-living adjustments

A.  The board of trustees may, upon majority vote of the board, grant or provide a cost-of-living adjustment to retired members who have been retired for at least one full calendar year as provided for in Subsection D, but only in the event that:

(1)  At the end of the system's current fiscal year the funded ratio of the system, as of the end of the previous fiscal year, equals or exceeds the target ratio as of that date for the system, and

(2)  The level of the Consumer Price Index for All Urban Consumers (CPI-U) for the current fiscal year is at least three percent higher than the level of the CPI-U for the fiscal year in which the last cost-of-living adjustment was granted.

B.  As used in this Section, the "funded ratio" as of any fiscal year end shall be defined as the ratio of the actuarial value of assets to the actuarial accrued liability under the funding method prescribed by the office of the legislative auditor.  The actuarial value of assets and actuarial accrued liability for the system shall be those amounts reported to the office of the legislative auditor in the Annual Report for Public Retirement Systems.

C.  As used in this Section, the "target ratio" as of any fiscal year end shall be defined as the lesser of (1) or (2) below:

(1)  One hundred percent.

(2)  The sum of (a), (b), (c), and (d) below:

(a)  The funded ratio as of the 1986 Fiscal Year end.

(b)  The number of fiscal years elapsed since the 1986 Fiscal Year end multiplied by one-thirtieth of the difference between one hundred percent and the funded ratio of the system as of the 1986 Fiscal Year end.

(c)  The amount of each change in funded ratio due to mergers or changes in actuarial methods or assumptions occurring after the 1986 Fiscal Year end.

(d)  For each change in funded ratio due to mergers or changes in actuarial methods or assumptions occurring after the 1986 Fiscal Year end, an amount of opposite arithmetic sign from such change in funded ratio equal in absolute value to the number of fiscal years since the change in funded ratio multiplied by one-thirtieth of the original change in funded ratio due to the merger or change in actuarial methods or assumptions.

D.  Any cost-of-living adjustment granted by the board of trustees shall not exceed the lesser of:

(1)  An increase in benefits of two and one-half percent per year for each full calendar year of retirement.

(2)  An increase in benefits of forty dollars per month in any one year.

Acts 1986, No. 1063, §1, eff. Oct. 1, 1986; Redesignated from R.S. 13:959 by Acts 1991, No. 74, §3, eff. June 25, 1991; Acts 1999, No. 1211, §1, eff. July 1, 1999; Acts 2003, No. 626, §1, eff. July 1, 2003.