(a) After retirement, in accordance with the provisions of this part, each member of fund B shall receive, during such member’s lifetime, a retirement allowance payable in monthly installments at an annual rate equal to the sum of (1) and (2) as follows: (1) To the extent that such member’s average annual rate of pay for the last ten years of service, including service credited under the provisions of sections 7-442a and 7-442b, is derived from pay with respect to which contributions have been deducted under § 7-453 or would have been deducted had such member been included in such system during the entire ten years, one-twelfth of one and one-sixth per cent of such average annual pay, multiplied by the number of months of such member’s service; (2) to the extent that such member’s average annual rate of pay for the three highest-paid years of service exceeds the average obtained in subdivision (1) of this subsection, one-twelfth of two per cent of such average annual pay, multiplied by the number of months of such member’s service; provided such allowance for permanent and total disability arising out of and in the course of such member’s employment, as defined in the Workers’ Compensation Act, shall not be less than one-twelfth of one-half of the member’s annual pay at the time such member’s disability was incurred. Any amount or amounts received under the Workers’ Compensation Act shall be deducted from such allowance, except that any member who has received a specific indemnity award under § 31-307 or 31-308 shall not have the amount of such indemnity award deducted from such member’s allowance. The retirement allowance herein provided shall be reduced by the amount of any retirement allowance concurrently payable under the provisions of § 7-431, and by the amount of any retirement allowance concurrently payable by the state employees’ retirement system or the retirement system of any municipality not participating under the provisions of this part, on account of a period of service for which credit has been transferred to the Municipal Employees’ Retirement Fund under the provisions of § 7-442b, or the monthly equivalent thereof if payable other than monthly. No retirement allowances under this section, before the reduction prescribed in the preceding sentence plus workers’ compensation payments and benefits under the Old Age and Survivors Insurance System on account of service in a participating municipality, if any, shall exceed one-twelfth of the member’s average annual pay during the three highest-paid years of municipal service, and, subject to the foregoing maximum limit, no such allowance plus payments shall be less than one thousand dollars annually.

(b) Each employee or spouse of a deceased employee retired under the Municipal Employees’ Retirement Act Fund B prior to July 1, 1971, shall be entitled, in addition to his or her original monthly retirement allowance, to an additional cost of living monthly allowance computed on the basis of his or her monthly retirement allowance, less any prior cost of living increases to which he or she was previously entitled, using the table in subdivision (1) of this subsection.

(1) Such cost of living allowances shall commence on July 1, 1973, and shall be computed at the rates set forth in the following table:

(2) The limitation of the maximum retirement allowance provided in subsection (a) of this section shall not be applicable to increases under this subsection.

(c) Each retired member of fund B shall have his allowance increased to the amount which would be payable based on his annual rate of pay for the three highest-paid years of service.

(d) For purposes of determining eligibility for retirement benefits for part-time employees under this section, a member’s part-time service shall be payable to a member whose service consists solely of part-time service without variation in the number of hours worked during all periods of his municipal service, such member’s service shall be treated as full-time service. For purposes of computing the retirement benefit payable to a member whose service consists of part-time and full-time service or whose service consists of part-time service rendered in different proportions to a full-time schedule, such member’s years of service and average salary shall be proportionately adjusted to produce a retirement benefit equivalent to that payable if his service had been rendered at an unvarying rate. As used in this subsection, “part-time service” means service by a member who customarily works less than a full-time schedule but no less than twenty hours per week.

(e) On and after January 1, 2002, the following formula shall be used for the purpose of calculating the monthly allowance of each member covered by the Old Age and Survivors Insurance System on the first of the month after such member becomes eligible for Social Security or until such member qualifies for a Social Security disability award, if earlier: One-twelfth of one and one-half per cent of such member’s final average pay up to the breakpoint for the year in which such member separated from service plus two per cent of such member’s final average pay in excess of the breakpoint for the year in which such member separated from service, multiplied by such member’s years of retirement credit and fractions thereof. Such allowance shall be reduced in recognition of any optional form of retirement income elected in accordance with § 7-439g. For the purposes of this subsection, “breakpoint” has the same meaning as “year’s breakpoint” in subsection (a) of § 5-192f.