(a) On a date to be established by the board of trustees, but not before April 1, 1967, the board of trustees is authorized to adopt a method of providing for postretirement benefit adjustments for the purpose of maintaining essentially no less purchasing power for a beneficiary in his postretirement years. Such method shall be based upon:

(1) Recommendation of the actuary for the board of trustees;

(2) Maintaining the actuarial soundness of the retirement system;

(3) Its application to the retirement income of members retiring on or after the adoption of such method by the board of trustees; and

(4) Any additional contribution by the member in an amount not to exceed one-fourth of 1 percent of his monthly earnable compensation.

This Code section shall also be applicable to those members retiring before April 1, 1967.

(b)(1) Effective July 1, 1988, the monthly retirement benefit of each beneficiary who was receiving a benefit on July 1, 1981, shall be increased by:

(A) One dollar for each full year of creditable service, other than creditable service based on forfeited annual and sick leave and creditable service resulting from any projection of service under the provisions of this chapter, which the member had at the time of retirement; plus

(B) One dollar for each full year which has elapsed from the date of retirement until July 1, 1981,

provided that, if a beneficiary is receiving a monthly benefit exceeding $1,500.00 on July 1, 1988, no increase shall be granted to such beneficiary under this paragraph nor shall any portion of such increase be granted to a beneficiary which would cause such beneficiary's total monthly benefit as of July 1, 1988, to exceed $1,500.00.

(2) When the postretirement benefit adjustment provided by this subsection has been granted, there shall be no further postretirement benefit adjustments pursuant to the authority of this subsection.