2009 California Government Code - Section 31870-31874.6 :: Article 16.5. Cost Of Living Adjustment

31870.  The board shall before April 1 of each year determine
whether there has been an increase or decrease in the cost of living
as provided in this section. Notwithstanding Section 31481 or any
other provision of this chapter (commencing with Section 31450),
every retirement allowance, optional death allowance, or annual death
allowance payable to or on account of any member, of this system or
a superseded system, who retires or dies or who has retired or died
shall, as of April 1st of each year, be increased or decreased by a
percentage of the total allowance then being received found by the
board to approximate to the nearest one-half of 1 percent the
percentage of annual increase or decrease in the cost of living as of
January 1st of each year as shown by the then current Bureau of
Labor Statistics Consumer Price Index for All Urban Consumers for the
area in which the county seat is situated, but such change shall not
exceed 2 percent per year; however, the amount of any cost-of-living
increase or decrease in any year which is not met by the maximum
annual change of 2 percent in allowances shall be accumulated to be
met by increases or decreases in allowances in future years; except
that no decrease shall reduce the allowance below the amount being
received by the member or his beneficiary on the effective date of
the allowance or the application of this article, whichever is later.

31870.01.  (a) The board of retirement shall, before April 1 of each
year, determine whether there has been an increase or decrease in
the cost-of-living as provided in this section. Notwithstanding
Section 31481 or any other provision of this chapter, every
retirement allowance, optional death allowance, or annual death
allowance payable to or on account of any member, of this system or a
superseded system, who retires or dies or who has retired or died
shall, as of April 1st of each year, be increased or decreased to the
nearest one-tenth of 1 percent, by 40 percent of the annual increase
or decrease in the cost-of-living as of January 1st of each year as
shown by the then current (year ending December) Bureau of Labor
Statistics' Consumer Price Index for All Urban Consumers for the
United States City Average, except that no decrease shall reduce the
allowance below the amount being received by the member or his or her
beneficiary on the effective date of the allowance.
   (b) The allowance shall be increased a minimum of 2 percent in any
year in which the board's determination of cost-of-living change of
allowance would result in less, provided that the member or
beneficiary has an accumulated unpaid cost-of-living account
sufficient to provide the 2 percent increase.
   (c) When this section becomes applicable in a county, the
accumulated unpaid cost-of-living account of each retired member or
beneficiary under the superseded Section 31870, shall be transferred
to a like account under this section. Thereafter, no increases shall
be made to such account.
   (d) The board of retirement may adopt this section to be effective
in lieu of Section 31870, provided, that no increase in unfunded
actuarial liability nor in current member or employer contributions
to the system are required as a result of the adoption and is so
attested by an enrolled actuary. After adoption, the effective date
for increases or decreases in allowances pursuant to this section
shall be the next succeeding April 1.
   (e) This section shall apply only in a county of the first class,
as established by Sections 28020 and 28022, as amended by Chapter
1204 of the Statutes of 1971.

31870.1.  The board shall before April 1 of each year determine
whether there has been an increase or decrease in the cost of living
as provided in this section. Notwithstanding Section 31481 or any
other provision of this chapter (commencing with Section 31450),
every retirement allowance, optional death allowance, or annual death
allowance payable to or on account of any member, of this system or
superseded system who retires or dies or who has retired or died
shall, as of April 1st of each year, be increased or decreased by a
percentage of the total allowance then being received found by the
board to approximate to the nearest one-half of 1 percent, the
percentage of annual increase or decrease in the cost of living as of
January 1st of each year as shown by the then current Bureau of
Labor Statistics Consumer Price Index for All Urban Consumers for the
area in which the county seat is situated, but such change shall not
exceed 3 percent per year; however, the amount of any cost-of-living
increase or decrease in any year which is not met by the maximum
annual change of 3 percent in allowances shall be accumulated to be
met by increases or decreases in allowances in future years; except
that no decrease shall reduce the allowance below the amount being
received by the member or his beneficiary on the effective date of
the allowance or the application of this article, whichever is later.

31870.11.  (a) The board of retirement shall, before April 1 of each
year, determine whether there has been an increase or decrease in
the cost-of-living as provided in this section. Notwithstanding
Section 31481 or any other provision of this chapter, every
retirement allowance, optional death allowance, or annual death
allowance payable to or on account of any member, of this system or a
superseded system, who retires or dies or who has retired or died
shall, as of April 1st of each year, be increased or decreased to the
nearest one-tenth of 1 percent, by 60 percent of the annual increase
or decrease in the cost-of-living as of January 1st of each year as
shown by the then current (year ending December) Bureau of Labor
Statistics' Consumer Price Index for All Urban Consumers for the
United States City Average, except that no decrease shall reduce the
allowance below the amount being received by the member or his or her
beneficiary on the effective date of the allowance.
   (b) The allowance shall be increased a minimum of 3 percent in any
year in which the board's determination of cost-of-living change of
allowance would result in less, provided that the member or
beneficiary has an accumulated unpaid cost-of-living account
sufficient to provide the 3 percent increase.
   (c) When this section becomes applicable in a county, the
accumulated unpaid cost-of-living account of each retired member or
beneficiary under the superseded Section 31870.1, shall be
transferred to a like account under this section. Thereafter, no
increases shall be made to such account.
   (d) The board of retirement may adopt this section to be effective
in lieu of Section 31870.1, provided, that no increase in unfunded
actuarial liability nor in current member or employer contributions
to the system are required as a result of the adoption and is so
attested by an enrolled actuary. After adoption, the effective date
for increases or decreases in allowances pursuant to this section
shall be the next succeeding April 1.
   (e) This section shall apply only in a county of the first class,
as established by Sections 28020 and 28022, as amended by Chapter
1204 of the Statutes of 1971.

31870.2.  The board shall before April 1 of each year determine
whether there has been an increase or decrease in the cost of living
as provided in this section. Notwithstanding Section 31481 or any
other provision of this chapter (commencing with Section 31450),
every retirement allowance, optional death allowance, or annual death
allowance payable to or on account of any member, of this system or
superseded system who retires or dies or who has retired or died
shall, as of April 1st of each year, be increased or decreased by a
percentage of the total allowance then being received found by the
board to approximate to the nearest one-half of 1 percent, the
percentage of annual increase or decrease in the cost of living as of
January 1st of each year as shown by the then current Bureau of
Labor Statistics Consumer Price Index for All Urban Consumers for the
area in which the county seat is situated, but such change shall not
exceed 5 percent per year; however, the amount of any cost-of-living
increase or decrease in any year which is not met by the maximum
annual change of 5 percent in allowances shall be accumulated to be
met by increases or decreases in allowances in future years; except
that no decrease shall reduce the allowance below the amount being
received by the member or his beneficiary on the effective date of
the allowance or the application of this section, whichever is later.

31870.3.  Notwithstanding Section 31870.1, the board shall, before
April 1st of each year, determine whether there has been an increase
or decrease in the cost of living as provided in this section.
Notwithstanding Section 31481 or any other provision of this chapter,
every retirement allowance, optional death allowance, or annual
death allowance payable to, or on account of, any member of this
system who was covered under Section 31751 who retires or dies, or
who has retired or died, shall, as of April 1st of each year, be
increased or decreased by a percentage of the total allowance then
being received found by the board to approximate to the nearest
one-half of 1 percent, the percentage of annual increase or decrease
in the cost of living as of January 1st of each year as shown by the
then current Bureau of Labor Statistics Consumer Price Index for All
Urban Consumers for the area in which the county seat is situated,
but such change shall not exceed 4 percent per year; however, the
amount of any cost of living increase or decrease in any year which
is not met by the maximum annual change of 4 percent in allowances
shall be accumulated to be met by increases or decreases in
allowances in future years; except that no decrease shall reduce the
allowance below the amount being received by the member or his
beneficiary on the effective date of the allowance or the application
of this section, whichever is later.

31870.4.  Notwithstanding any other provision of law, the
accumulation established in Section 31870, 31870.1, 31870.2, or
31870.3 shall be computed by multiplying the existing accumulation
from prior years by an amount equal to one plus the amount of any
cost-of-living increase or decrease in the current year, and adding
to this result the "accumulation adjustment," where "accumulation
adjustment" means the amount of any cost-of-living increase or
decrease in the current year that is not met by the maximum annual
change in allowances provided in Section 31870, 31870.1, 31870.2, or
31870.3, whichever is applicable. At no time may the accumulation
established in Section 31870, 31870.1, 31870.2, or 31870.3 be less
than zero.
   This section shall not be operative in any county until it is
adopted by a majority vote of the board of supervisors. Upon adoption
of this section by the board of supervisors, the accumulation of
each member under Section 31870, 31870.1, 31870.2, or 31870.3,
whichever is applicable, shall be recomputed as if this section had
been in effect on the member's date of retirement.

31871.  Any increases in allowances which are based upon service
rendered prior to the applicable date of this article (as fixed
pursuant to Section 31874) shall be funded insofar as possible from
the moneys in the reserve described in Section 31592 which are in
excess of one (1) percent of the assets of the retirement system;
except that in counties which have applied Section 31592.2 the board
of supervisors may fund all or part of the increases from the county
general fund.

31872.  Any such increases in allowances which are not funded as
provided in Section 31871 and any such increases which are based upon
service rendered after the applicable date of this article (as fixed
pursuant to Section 31874) shall be funded by contributions set by
the board, as it determines necessary.

31873.  Any increases in contributions shall be shared equally
between the county or district and the contributing members, with the
individual member's contributions based upon the member's age at his
or her nearest birthday at time of entrance into the retirement
system. The board of supervisors by a majority vote may elect to pay
part of the costs of the contributions which would otherwise be
assessed to the individual members.

31873.1.  Any cost-of-living contributions required for benefits
under Section 31870.3 shall be shared equally between the county or
district and the contributing members. The individual member's
contributions shall be based upon the member's age at the member's
nearest birthday at time of entrance into the retirement system, and
shall be expressed as a percentage of the member's normal
contribution rate. The board of supervisors by a majority vote may
elect to pay all or part of the costs of the contributions which
would otherwise be assessed to the individual members.
   Until revised by subsequent actuarial studies, the member's
cost-of-living contribution rate shall be 39.57 percent of the member'
s normal contribution rate. These initial cost-of-living contribution
rates are shown in the following table, according to the member's
age at the time of entry into the system:

  Age of entry                       Percentage
  into system                     of contribution
  16..........................          1.16
  17..........................          1.16
  18..........................          1.16
  19..........................          1.16
  20..........................          1.16
  21..........................          1.16
  22..........................          1.16
  23..........................          1.16
  24..........................          1.16
  25..........................          1.17
  26..........................          1.17
  27..........................          1.18
  28..........................          1.18
  29..........................          1.19
  30..........................          1.20
  31..........................          1.20
  32..........................          1.21
  33..........................          1.22
  34..........................          1.23
  35..........................          1.24
  36..........................          1.25
  37..........................          1.26
  38..........................          1.27
  39..........................          1.28
  40..........................          1.29
  41..........................          1.30
  42..........................          1.31
  43..........................          1.32
  44..........................          1.33
  45..........................          1.34
  46..........................          1.36
  47..........................          1.37
  48..........................          1.38
  49..........................          1.40
  50..........................          1.41
  51..........................          1.43
  52..........................          1.44
  53..........................          1.46
  54 and over.................          1.47

31874.  This article (commencing with Section 31870) may be made
applicable in any county on the date specified in the ordinance, or
if no such date is specified, on the first day of the month after the
effective date of an ordinance adopted by the board of supervisors
to this effect, provided that an actuarial survey of the retirement
system has been made by the adopting county prior to the passage of
said ordinance. No provision of this chapter shall prevent or be
construed to prevent the use and expenditure of surplus described in
Section 31592.2 to fund any part or all of any increases in
allowances otherwise permitted after this article or Article 16.6
(commencing with Section 31875) or both this article and Article 16.6
or any of the provisions of this article or Article 16.6 have been
made applicable.
   Except in a county of the first class, upon adoption by a county
providing increases in allowances pursuant to this article, of
Article 5.5 (commencing with Section 31510) of this chapter, only
that portion of the increases in allowances which is paid from
surplus earnings described in Section 31592.2 shall be paid, instead,
from the Supplemental Retiree Benefits Reserve established pursuant
to Section 31510.8.

31874.1.  Whenever the percentage of annual increase in the cost of
living as of January 1st of each year as shown by the Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers exceeds 3
percent, all or part of such excess over 3 percent shall be applied
to the retirement allowances, optional death allowances or annual
death allowances increased in Section 31870 or 31870.1. The board of
supervisors shall determine the amount of such excess to be applied,
and the cost of the increases in allowances provided shall be paid
from county and district contributions.
   This section shall not be operative in any county until it is
adopted by a majority vote of the board of supervisors.

31874.2.  The board of supervisors in any county, by a majority
vote, may enact an ordinance providing that the maximum annual change
pursuant to this article shall be increased to 4, 5, or 6 percent,
as determined by the board, on the operative date of such ordinance.

31874.3.  (a) (1) Whenever the percentage of annual increase in the
cost of living as of January 1 of each year as shown by the Bureau of
Labor Statistics Consumer Price Index for All Urban Consumers
exceeds the maximum benefit increase provided in Section 31870,
31870.1, 31870.2, or 31870.3, whichever is applicable, the board of
retirement may provide that all or part of the excess percentage
increase shall be applied to the retirement allowances, optional
death allowances, or annual death allowances increased in Section
31870, 31870.1, 31870.2, or 31870.3. The board shall determine the
amount of the excess to be applied, which amount shall not exceed an
amount that can be paid from earnings of the retirement fund that are
in excess of the total interest credited to contributions and
reserves plus 1 percent of the total assets of the retirement fund.
   (2) The supplemental increases in excess of the increases applied
to the retirement allowances, optional death allowances, or annual
death allowances pursuant to Section 31870, 31870.1, 31870.2, or
31870.3 shall not become a part of the retirement allowances,
optional death allowances, or annual death allowances to be increased
by subsequent increases under Section 31870, 31870.1, 31870.2, or
31870.3.
   (3) This subdivision shall be operative in any county that has
elected by a majority vote of the board of supervisors to make either
Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that
county.
   (b) (1) The board of retirement may, instead of taking action
pursuant to subdivision (a), provide supplemental cost-of-living
increases, effective on a date to be determined by the board, to the
retirement allowances, optional death allowances, or annual death
allowances increased in Section 31870, 31870.1, 31870.2, or 31870.3;
provided however, that only those members shall be eligible for this
increase whose accumulations established by Section 31870, 31870.1,
31870.2, or 31870.3 shall equal or exceed 20 percent as of January 1
of the year in which the board of retirement adopts an increase under
this subdivision.
   (2) The supplemental increases to the retirement allowances,
optional death allowances or annual death allowances increased in
Section 31870, 31870.1, 31870.2, or 31870.3 shall not become a part
of the retirement allowances, optional death allowances or annual
death allowances to be increased by subsequent increases under
Section 31870, 31870.1, 31870.2, or 31870.3.
   (3) This subdivision shall be operative in any county that has
elected by a majority vote of the board of supervisors to make either
Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that
county.
   (c) (1) The board of retirement may, instead of taking action
pursuant to subdivision (a) or (b), provide supplemental
cost-of-living increases, on a prefunded basis and effective on a
date to be determined by the board, to the retirement allowances,
optional death allowances, or annual death allowances increased in
Section 31870, 31870.1, 31870.2, or 31870.3; provided however, only
those members shall be eligible for this increase whose accumulations
established by Section 31870, 31870.1, 31870.2, or 31870.3 equal or
exceed 20 percent as of January 1 of the year in which the board of
retirement takes action pursuant to this subdivision.
   (2) The supplemental increases to the retirement allowances,
optional death allowances, or annual death allowances increased in
Section 31870, 31870.1, 31870.2, or 31870.3 shall become a part of
the retirement allowances, optional death allowances, or annual death
allowances and shall serve to reduce the accumulations established
by Section 31870, 31870.1, 31870.2, or 31870.3, as applicable, by the
same percentage as the payment that is made pursuant to this
section.
   (3) Before the board of retirement provides benefits pursuant to
this subdivision, the costs of the benefits shall be determined by a
qualified actuary and the board of retirement shall, with the advice
of the actuary, provide for the full funding of the benefits
utilizing funds in the reserve against deficiencies established
pursuant to Section 31592.2, using surplus earnings that exceed 1
percent of the total assets of the retirement system.
   (4) This subdivision shall be operative in any county that has
elected by a majority vote of the board of supervisors to make either
Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that
county.
   (d) Upon adoption by any county providing benefits pursuant to
this section, of Article 5.5 (commencing with Section 31610) of this
chapter, the board of retirement shall, instead, pay those benefits
from the Supplemental Retiree Benefit Reserve established pursuant to
Section 31618.

31874.4.  Notwithstanding any other provision of law, the board of
supervisors in a county of the 10th class may provide in any
ordinance implementing any section in this article that the provision
of this article requiring unused increases or decreases in any year
to be accumulated for future years shall not apply to those employees
and officials specified in the ordinance.

31874.5.  Whenever the percentage of annual increase in the cost of
living as of January 1 of each year as shown by the Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers exceeds a
full 3 percent of the existing cost-of-living increase factor
provided by any provision of this article, an additional 1 percent of
the excess for each full 3 percent over the existing increase factor
shall be applied to the retirement allowances, optional death
allowances, or annual death allowances increased by any provision of
this article. The increases in allowances resulting from the adoption
of this section shall be used to offset any accumulated carryover
balances under existing cost-of-living adjustments. The cost of
implementing this section shall be prefunded commencing with the
adoption of this section by the board of supervisors. The method of
paying the cost of implementing this section may be mutually agreed
to in a memorandum of understanding executed by the employer and
employee representatives. The board of retirement shall conduct the
actuarial studies to determine those costs.
   This section shall not be operative in any county until it is
adopted by a majority vote of the board of supervisors.

31874.6.  (a) Notwithstanding any other provision of law, on an
annual basis, the board of retirement may, with the approval of the
county board of supervisors, grant a cost-of-living adjustment on a
prefunded basis to the retirement allowances, optional death
allowances, or annual death allowances payable to or on account of
eligible members. The action by the board of retirement may specify a
date as of which the adjustment shall be effective and, if no
effective date is specified, the adjustment shall be made in
allowances payable for the time commencing on the first day of the
month following the action by the board of retirement or approval by
the county board of supervisors, whichever is later.
   (b) Before the board of retirement may grant an adjustment
pursuant to this section, the total costs of the adjustment shall be
determined by a qualified actuary and the board shall determine, with
the advice of the actuary, that full funding of the adjustment can
be provided from earnings of the retirement fund that are in excess
of the total interest credited to contributions and reserves plus 1
percent of the total assets of the retirement fund.
   (c) The adjustment provided by this section shall be payable only
to those retired members, survivors, beneficiaries, or successors in
interest whose accumulated loss of purchasing power equals or exceeds
20 percent as of January 1 of the year the board of retirement takes
action pursuant to this section. Loss of purchasing power shall be
determined by the board of retirement based on the difference between
the following:
   (1) The initial retirement allowance, optional death allowance, or
annual death allowance as it would have been increased by the
cumulative total effect of the annual changes, rounded to the nearest
one-half of 1 percent, in the Consumer Price Index for All Urban
Consumers for the area in which the county seat is situated.
   (2) The retirement allowance, optional death allowance, or annual
death allowance as actually increased by cost-of-living adjustments
previously granted with respect to the allowance.
   (d) A cost-of-living adjustment granted pursuant to this section
shall become part of the retirement allowance, optional death
allowance, or annual death allowance to be increased by any
subsequent cost-of-living adjustments. The granting of an increase
pursuant to this section in any particular year does not create any
continuing entitlement to additional increases in subsequent years,
and does not create any claim by a retired member, survivor,
beneficiary, or successor in interest against the county, district,
or retirement fund for any increase in any allowance paid or payable
prior to the effective date of the action by the board of retirement
pursuant to this section.
   (e) This section shall only be applicable in the following
counties:
   (1) A county of the 19th class, as defined by Sections 28020 and
28040, as amended by Chapter 1204 of the Statutes of 1971.
   (2) A county of the 32nd class, as defined by Sections 28020 and
28053, as amended by Chapter 1204 of the Statutes of 1971.