The cost-of-living increase granted to certain retired persons under the Teachers' Retirement System by this article may be financed, if possible, from existing funds of the Teachers' Retirement System subject to the following provisions and conditions:

(1) If the actuary for the Teachers' Retirement System finds that the cost-of-living increase can be paid for the 1996-97 fiscal year without appropriation of additional funds to the system without having an adverse actuarial impact on the system, beginning October 1, 1996, the Board of Control of the system may provide the cost-of-living increase authorized by this section. It is the intent of this section as pertains to funding similar increases in the future, that the funding thereof shall be in accordance with the requirements of Section 16-25-21. If the actuarial certification of the cost involved in funding the cost-of-living increase provided by this article, as required by Section 16-25-28, is not received by October 1, 1996, but satisfies the above condition when it is received during the 1996-97 fiscal year, then the cost-of-living increase shall be paid retroactively to October 1, 1996.

(2) If the conditions in subdivision (1) are not met, the cost-of-living increase shall be paid beginning October 1, 1997, and the cost of this benefit shall be included in the amount certified by the Board of Control to be contributed by the state under Section 16-25-21 or any other applicable law. The provisions of this subdivision shall govern and override any seeming or actual conflicts with other provisions of this section.