(a) The state board by rule may authorize the governing body of a participating department to:
(1) make one or more supplemental payments to its retirees and beneficiaries of the pension system; or
(2) provide an increase in the amount of annuities paid to retirees and beneficiaries of the pension system.
(a-1) The rules adopted under Subsection (a) may:
(1) include procedures for the governing body of a participating department to request the approval of the state board to make a supplemental payment or increase an annuity under the rules; and
(2) prohibit the governing body of a participating department from making a supplemental payment or increasing an annuity under the rules without approval from the state board.
(b) The governing body of a participating department that elects an option under a rule adopted under this section shall fund all increased benefits that are provided to its retirees and beneficiaries of the pension system under the option.
(c) State contributions may not be used to fund any option elected under a rule adopted under this section to make a supplemental payment or increase an annuity.