(a) The retirement benefit, pension or annuity payments accruing after June 30, 1994, to each retirant and each local school annuitant from the retirant’s retirement system or the local school annuitant’s separate retirement system maintained by a local school district, shall be increased by an amount equal to the greater of: (1) 1.5% of the retirement benefit, pension or annuity payment in effect on July 1, 1993; or (2) $.50 for each year of credited service and $.50 for each year since the retirant’s or local school annuitant’s retirement or, if a disability recipient, $.50 for each year of disability from the retirant’s retirement system or the local school annuitant’s separate retirement system maintained by a local school district. For the purpose of determining years of credited service and years of retirement and disability, as provided in this section, a remainder of six months or more will be rounded to a whole year and a remainder of less than six months will be disregarded. Such payments shall be paid by such retirement system to the retirant or by such separate retirement system maintained by a local school district to the local school annuitant during such period. All such increased payments to local school annuitants shall be paid by the local school district maintaining a separate retirement system and such payments shall be made at no additional cost to any employer other than the local school district. Such payments shall be paid out of the net amount of investment income of the system.

(b) As used in this section:

(1) “Retirant” means (A) any person who is a member of a retirement system and who retired prior to July 1, 1993, (B) any person who is a special member of a retirement system and who retired prior to July 1, 1993, (C) any person who is a joint annuitant or beneficiary of any member described in clause (A) or any special member described in clause (B), and (D) any insured disability benefit recipient, except that “retirant” does not include any person whose total service credit is based exclusively on service as a member of the legislature or exclusively on such legislative service and on military service or out-of-state teaching service, or exclusively on both such military and out-of-state teaching service in conjunction with such legislative service.

(2) “Retirement system” means the Kansas public employees retirement system, the Kansas police and firemen’s retirement system, the state school retirement system and the retirement system for judges.

(3) “Local school annuitant” means (A) any person who is an annuitant with 10 or more years of service, who is receiving an annuity from a school district maintaining a separate retirement system, whose annuity is not included, in whole or in part, in payments made to such school district under Kan. Stat. Ann. § 72-5512b, and amendments thereto, and who is not a member of a group I or of group II as defined in Kan. Stat. Ann. § 72-5518, and amendments thereto, and (B) any person who is receiving an annuity from a school district maintaining a separate retirement system which is receiving an aggregate payment from the Kansas public employees retirement system under Kan. Stat. Ann. § 72-5512b, and amendments thereto, and who retired prior to September 1, 1981.

(4) “Insured disability benefit recipient” means any person receiving an insured disability benefit under Kan. Stat. Ann. § 74-4927, and amendments thereto, prior to July 1, 1993.