Bill Text: FL S0242 | 2015 | Regular Session | Comm Sub

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Bill Title: Publicly Funded Retirement Plans

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2015-04-24 - Laid on Table, companion bill(s) passed, see CS/CS/HB 1309 (Ch. 2015-157) [S0242 Detail]

Download: Florida-2015-S0242-Comm_Sub.html

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       Florida Senate - 2015                              CS for SB 242
       
       
        
       By the Committee on Community Affairs; and Senator Brandes
       
       
       
       
       
       578-02123-15                                           2015242c1
    1                        A bill to be entitled                      
    2         An act relating to publicly funded retirement plans;
    3         amending s. 112.63, F.S.; requiring that actuarial
    4         reports for certain retirement plans include mortality
    5         tables; specifying requirements; amending s. 112.664,
    6         F.S.; revising information to be included in a defined
    7         benefit system or plan’s annual report to the
    8         Department of Management Services; providing a
    9         declaration of important state interest; providing an
   10         effective date.
   11          
   12  Be It Enacted by the Legislature of the State of Florida:
   13  
   14         Section 1. Subsection (1) of section 112.63, Florida
   15  Statutes, is amended to read:
   16         112.63 Actuarial reports and statements of actuarial
   17  impact; review.—
   18         (1) Each retirement system or plan subject to the
   19  provisions of this act shall have regularly scheduled actuarial
   20  reports prepared and certified by an enrolled actuary. The
   21  actuarial report shall consist of, but is shall not be limited
   22  to, the following:
   23         (a) Adequacy of employer and employee contribution rates in
   24  meeting levels of employee benefits provided in the system and
   25  changes, if any, needed in such rates to achieve or preserve a
   26  level of funding deemed adequate to enable payment through the
   27  indefinite future of the benefit amounts prescribed by the
   28  system, which shall include a valuation of present assets, based
   29  on statement value, and prospective assets and liabilities of
   30  the system and the extent of unfunded accrued liabilities, if
   31  any.
   32         (b) A plan to amortize any unfunded liability pursuant to
   33  s. 112.64 and a description of actions taken to reduce the
   34  unfunded liability.
   35         (c) A description and explanation of actuarial assumptions.
   36         (d) A schedule illustrating the amortization of unfunded
   37  liabilities, if any.
   38         (e) A comparative review illustrating the actual salary
   39  increases granted and the rate of investment return realized
   40  over the 3-year period preceding the actuarial report with the
   41  assumptions used in both the preceding and current actuarial
   42  reports.
   43         (f) The mortality tables used in either of the two most
   44  recently published actuarial valuation reports of the Florida
   45  Retirement System, including the projection scale for mortality
   46  improvement. Appropriate risk and collar adjustments must be
   47  made based on plan demographics. The tables must be used for
   48  assumptions for preretirement and postretirement mortality.
   49         (g)(f) A statement by the enrolled actuary that the report
   50  is complete and accurate and that in his or her opinion the
   51  techniques and assumptions used are reasonable and meet the
   52  requirements and intent of this act.
   53  
   54  The actuarial cost methods utilized for establishing the amount
   55  of the annual actuarial normal cost to support the promised
   56  benefits shall only be those methods approved in the Employee
   57  Retirement Income Security Act of 1974 and as permitted under
   58  regulations prescribed by the Secretary of the Treasury.
   59         Section 2. Subsection (1) of section 112.664, Florida
   60  Statutes, is amended to read:
   61         112.664 Reporting standards for defined benefit retirement
   62  plans or systems.—
   63         (1) In addition to the other reporting requirements of this
   64  part, within 60 days after receipt of the certified actuarial
   65  report submitted after the close of the plan year that ends on
   66  or after June 30, 2014, and thereafter in each year required
   67  under s. 112.63(2), each defined benefit retirement system or
   68  plan, excluding the Florida Retirement System, shall prepare and
   69  electronically report the following information to the
   70  Department of Management Services in a format prescribed by the
   71  department:
   72         (a) Annual financial statements that comply are in
   73  compliance with the requirements of the Governmental Accounting
   74  Standards Government Accounting and Standard Board’s Statement
   75  No. 67, titled “Financial Reporting for Pension Plans,” and
   76  Statement No. 68, titled “Accounting and Financial Reporting for
   77  Pensions,” using mortality tables used in either of the two most
   78  recently published actuarial valuation reports of the Florida
   79  Retirement System, including the projection scale for mortality
   80  improvement. Appropriate risk and collar adjustments must be
   81  made based on plan demographics. The tables must be used for
   82  assumptions for preretirement and postretirement mortality RP
   83  2000 Combined Healthy Participant Mortality Tables, by gender,
   84  with generational projection by Scale AA.
   85         (b) Annual financial statements similar to those required
   86  under paragraph (a), but which use an assumed rate of return on
   87  investments and an assumed discount rate that are equal to 200
   88  basis points less than the plan’s assumed rate of return.
   89         (c) Information indicating the number of months or years
   90  for which the current market value of assets are adequate to
   91  sustain the payment of expected retirement benefits as
   92  determined in the plan’s latest valuation and under the
   93  financial statements prepared pursuant to paragraphs (a) and
   94  (b).
   95         (d) Information indicating the recommended contributions to
   96  the plan based on the plan’s latest valuation, and the
   97  contributions necessary to fund the plan based on financial
   98  statements prepared pursuant to paragraphs (a) and (b), stated
   99  as an annual dollar value and a percentage of valuation payroll.
  100         Section 3. The Legislature finds that a proper and
  101  legitimate state purpose is served when employees and retirees
  102  of the state and its political subdivisions, and the dependents,
  103  survivors, and beneficiaries of such employees and retirees, are
  104  extended the basic protections afforded by governmental
  105  retirement systems that provide fair and adequate benefits and
  106  that are managed, administered, and funded in an actuarially
  107  sound manner as required by s. 14, Article X of the State
  108  Constitution and part VII of chapter 112, Florida Statutes.
  109  Therefore, the Legislature determines and declares that this act
  110  fulfills an important state interest.
  111         Section 4. This act shall take effect July 1, 2015.