(a)     Normal retirement date.

(1)     For those who were members prior to May 9, 1978, the normal retirement date shall be the first day of the month coincident with or next following the earlier of the attainment of age fifty (50), regardless of years of credited service, or the completion of twenty-five (25) years of credited service, regardless of age.

(2)     For those becoming members on or after May 9, 1978, the normal retirement date shall be the first day of the month coincident with or next following the earlier of the attainment of age fifty-five (55) and the completion of ten (10) years of credited service or the completion of twenty-five (25) years of credited service, regardless of age.

(3)     A member may retire on his or her normal retirement date or on the first day of any month thereafter, and each member shall become one hundred (100) per cent vested in his or her accrued benefit on the member's normal retirement date. Normal retirement under the system is retirement from employment with the city on or after the normal retirement date.

(b)     Normal retirement benefit. A member retiring hereunder on or after his normal retirement date shall receive a monthly benefit which shall commence on his retirement date and be continued thereafter during member's lifetime, but with one hundred twenty (120) monthly payments guaranteed in any event. The monthly retirement benefit shall equal two and one-half (2.5) per cent of average final compensation for each year of credited service. For members retiring on or after October 1, 1995, the monthly retirement benefit shall equal three (3) per cent of average final compensation for each year of credited service.

(c)     Early retirement date. A member may retire on his early retirement date which shall be the first day of any month coincident with or next following the earlier of the attainment of age fifty (50) or the completion of twenty (20) years of credited service. Early retirement under the system is retirement from employment with the city on or after the early retirement date and prior to the normal retirement date.

(d)     Early retirement benefit. A member retiring hereunder on his early retirement date may receive either a deferred or an immediate monthly retirement benefit payable in the same form as for normal retirement as follows:

(1)     A deferred monthly retirement benefit which shall commence on what would have been his normal retirement date had he continued employment as a firefighter and shall be continued on the first day of each month thereafter. The amount of each such deferred monthly retirement benefit shall be determined in the same manner as for retirement on his normal retirement date except that credited service and average final compensation shall be determined as of his early retirement date; or

(2)     An immediate monthly retirement benefit which shall commence on his early retirement date and shall be continued on the first day of each month thereafter. The benefit payable shall be as determined in subsection (1) above, reduced by three (3) per cent for each year by which the commencement of benefits precedes the date which would have been the member's normal retirement date had he continued employment as a firefighter.

(e)     Variable cost of living adjustment. There is hereby established an "enhanced benefit account" to provide for a lump sum variable cost of living adjustment for all retirees who retired, or members who will be retired under normal, early or disability retirement or those who became terminated vested on or after September 30, 1996 and their beneficiaries, in accordance with the following provisions:

(1)     Commencing on March 1, 1997 and each March 1 thereafter, the amount available for supplemental retirement benefits shall be determined to be the sum of:

a.     Fifty (50) per cent of the amount by which the fund's net investment income (gross investment income less all costs associated with the investments) exceeds the fund's investment objective of an eight (8) per cent yield for the preceding fiscal year (October 1 to September 30), and

b.     Fifty (50) per cent of the amount by which the premium taxes collected and distributed by the state pursuant to section 30-43 of the Melbourne City Code, as amended from time to time, exceeds five and six-tenths (5.6) per cent of covered payroll for the members during the preceding fiscal year.

The investment objective and the per centage of covered payroll shall be known as the "benchmark rates."

(2)     If the sum pursuant to the calculation in subsection (e)(1) above results in a positive amount, said supplemental retirement funds shall be credited to the enhanced benefit account as of April 1 each year and used to provide supplemental retirement benefits to retirees as of April 1 each year, as follows:

a.     Supplemental retirement benefits are only payable to retirees retired as of the preceding September 30.

b.     The supplemental retirement benefits balance shall be allocated among the eligible retirees based upon (i) the number of full months of retirement during the preceding fiscal year and (ii) in proportion to the amount of each retiree's actual monthly retirement benefit.

c.     The supplemental retirement benefit funds disbursed each year shall be limited to a maximum of three (3) per cent of the pension benefit per annum. In the event that in any year the balance in the fund would result in a higher payment, the excess shall be returned in the enhanced benefits account and carried forward to the next year.

(3)     The amount of the supplemental retirement benefit funds disbursed shall be limited to the amount available in the fund. The cumulative value of the enhanced benefit account allocation provided by subsection (e)(1)a. above shall not exceed the cumulative net actuarial gains and losses from all sources incurred from the inception of this provision. In the event any undisbursed funds remain in the enhanced benefit account after payment of the annual supplemental benefit, such excess shall be carried forward to the next year. The parties agree that any funds carried forward in the enhanced benefit account shall be credited with investment earnings achieved by the pension fund attributable to said funds.

(4)     The board is hereby delegated the authority to interpret and administer the provisions of this subsection (e) on variable cost of living.

(f)     Supplemental benefit.

(1)     Effective October 1, 2003, all current and future service retirees (including DROP participants once they begin to draw their monthly benefit), disability retirees, their joint pensioners or beneficiaries, and all current and future vested terminated persons who begin receipt of benefits on or after that date, shall receive a monthly supplemental benefit equal to five dollars ($5.00) for each full year of credited service, payable for life.