(1) When a city belonging to MPORS has not negotiated a salary agreement with its actively employed police officers by July 1 of any year, the following actions will be taken by MPERA:

(a) Retirement benefits will be paid to non-GABA retirees from that city using the most recent base salary for a newly confirmed police officer negotiated by the city and reported to MPERA.

(b) When a salary is negotiated by the city and MPERA is notified of a change in base pay for the city's newly confirmed police officers, retirement benefits will be recalculated and adjustments paid retroactively to non-GABA retirees from that city.

(c) Updated reports will be sent to the State Auditor certifying the increased retirement benefits payable from insurance premium tax funds during a given fiscal year as those amounts become known.