This subtitle applies only to an allowance paid to a former member, a retiree, or the surviving beneficiary of a deceased member, former member, or retiree of: the Correctional Officers’ Retirement System; the Employees’ Pension System; the Employees’ Retirement System; the Law Enforcement Officers’ Pension System; the Local Fire and Police System; the State Police Retirement System; the Teachers’ Pension System; and the Teachers’ Retirement System. This subtitle does not apply to an allowance that is payable under the Judges’ Retirement System, under the Legislative Pension Plan, or for a Governor under § 22–405 of this article. Except as provided in paragraph (2) of this subsection, each fiscal year, the Board of Trustees shall adjust an allowance as provided in this subtitle. An initial cost–of–living adjustment may not be made until the second July 1 after the day preceding the effective date of an allowance. A cost–of–living adjustment does not apply to: benefits paid in a single payment; the return of accumulated contributions; or benefits attributable to additional contributions. Except as provided in paragraph (2) of this subsection, and subject to subsection (f) of this section, to determine the cost–of–living rate used to adjust an allowance in a fiscal year, the Board of Trustees shall: subtract the Consumer Price Index for the calendar year ending December 31 in the second preceding fiscal year from the Consumer Price Index for the calendar year ending December 31 in the preceding fiscal year; and divide the amount determined under item (i) of this paragraph by the Consumer Price Index for the calendar year ending December 31 in the second preceding fiscal year. The cost–of–living rate used to adjust an allowance in a fiscal year may not exceed any cost–of–living rate cap that is applicable to the allowance under § 29–404(c), § 29–405(c), § 29–406(c), or § 29–408(c) of this subtitle. A cost–of–living adjustment payable in a fiscal year shall be determined as provided in this subsection. For a compound cost–of–living adjustment, the cost–of–living adjustment as of July 1 of a fiscal year shall be determined by multiplying the cost–of–living rate determined in subsection (c) of this section by the sum of: the initial allowance; and the accumulated cost–of–living adjustment amount. For a simple cost–of–living adjustment, the cost–of–living adjustment as of July 1 of a fiscal year shall be determined by multiplying the cost–of–living rate determined in subsection (c) of this section by the initial allowance. The total allowance payable in any fiscal year shall be the sum of: the initial allowance; the cost–of–living adjustment; the accumulated cost–of–living adjustment amount; and any additional annuity. In this subsection, “zero rate fiscal year” means any fiscal year when the cost–of–living rate calculated under subsection (c) of this section is less than 0%. For any fiscal year in which the cost–of–living rate determined under subsection (c) of this section is less than 0%, the cost–of–living rate for that fiscal year shall be 0%. This paragraph applies only to a fiscal year that is not a zero rate fiscal year. Subject to subparagraph (iii) of this paragraph: for a fiscal year that follows immediately after a zero rate fiscal year, the cost–of–living rate determined under subsection (c) of this section shall be reduced by the difference between 0% and the cost–of–living rate that would have been determined under subsection (c) of this section for the preceding fiscal year without regard to paragraph (2) of this subsection; and for a fiscal year that follows immediately after 2 or more consecutive zero rate fiscal years, the cost–of–living rate determined under subsection (c) of this section shall be reduced by the difference between 0% and the total cost–of–living rate that would have been determined under subsection (c) of this section for each of those fiscal years without regard to paragraph (2) of this subsection. If the rate reduction required for any fiscal year under subparagraph (ii) of this paragraph would reduce the cost–of–living rate for the fiscal year to be less than 0%, the difference between 0% and the excess rate reduction shall be deducted from the cost–of–living rate in future years, subject to paragraph (2) of this subsection, until the total required rate reduction has been fully applied.