1. Each member who retires on, before or after January 1, 2000, shall receive, beginning with the first year after retirement, an increase in the amount of benefits received by the member during the preceding year equal to the increase in the consumer price index calculated in accordance with subsection 2 of this section, provided however that such automatic increase shall not exceed one percent in any year. The total increase in the amount of benefits received pursuant to the provisions of this subsection shall not exceed fifty percent of the initial benefit which the member received upon retirement.

2. For the purposes of this section, any increase in the consumer price index shall be determined by the board in February of each year, based upon the consumer price index for the preceding calendar year over the consumer price index for the calendar year immediately prior thereto. Any increase so determined shall be applied by the board in calculating any benefit increases that become payable pursuant to this section for the twelve-month period beginning with the July first immediately following such determination.

3. Nothing in this section shall be construed to prohibit a member from waiving his or her right to receive an annual increase provided pursuant to this section. The waiver shall be final as to the annual increase waived.