Bill Text: FL S7046 | 2014 | Regular Session | Introduced
Bill Title: Florida Retirement System
Spectrum: Committee Bill
Status: (N/A - Dead) 2014-02-19 - Submit as committee bill by Community Affairs (SB 1114) [S7046 Detail]
Download: Florida-2014-S7046-Introduced.html
Florida Senate - 2014 (PROPOSED COMMITTEE BILL) SPB 7046
FOR CONSIDERATION By the Committee on Community Affairs
578-01704A-14 20147046__
1 A bill to be entitled
2 An act relating to the Florida Retirement System;
3 providing a directive to the Division of Law Revision
4 and Information; creating s. 121.601, F.S.; providing
5 definitions; creating s. 121.602, F.S.; requiring the
6 Trustees of the State Board of Administration to
7 establish the Florida Retirement System Cash Balance
8 Plan; requiring employees and employers to make
9 contributions for funding the plan; providing that the
10 plan provide a lump-sum or annuity benefit; providing
11 procedures for employees who are members of the
12 pension plan or investment plan before a certain date
13 to transfer to the cash balance plan; providing
14 procedures for employees employed after a certain date
15 to be enrolled in the investment plan or cash balance
16 plan; providing for the distribution of employee and
17 employer contributions and credits to the cash balance
18 plan; providing for the establishment of employee
19 annuity savings accounts and employer retirement
20 annuity accounts; providing vesting requirements;
21 providing for the payment of benefits, including
22 disability and death benefits, and the designation of
23 a beneficiary; providing for the purchase of
24 creditable service; providing eligibility for the
25 retiree health insurance subsidy and social security
26 coverage; providing for the education of members about
27 the cash balance plan and requiring the state board to
28 provide certain information to members on a quarterly
29 basis; requiring the plan to conform to Internal
30 Revenue Code requirements; authorizing the state board
31 to adopt rules relating to maintaining federal status;
32 providing for plan administration and imposing
33 fiduciary standards on such management; requiring an
34 annual actuarial analysis of the plan; directing the
35 Investment Advisory Council to make recommendations to
36 the board of directors; requiring the development and
37 adoption of an Investment Policy Statement; amending
38 s. 112.363, F.S., relating to the retiree health
39 insurance subsidy; conforming provisions to changes
40 made by the act; amending ss. 121.011 and 121.012,
41 F.S.; conforming cross-references; amending s.
42 121.021, F.S.; revising the definition of “Florida
43 Retirement System” to conform to changes made by the
44 act; amending s. 121.051, F.S.; prohibiting employees
45 from enrolling in the pension plan after a certain
46 date; providing exceptions; amending s. 121.052, F.S.;
47 prohibiting elected officials from joining the Senior
48 Management Service Class after a specified date;
49 amending s. 121.055, F.S.; prohibiting an elected
50 official eligible for membership in the Elected
51 Officers’ Class from enrolling in Senior Management
52 Service Class or Senior Management Service Optional
53 Annuity Program; closing the Senior Management Service
54 Optional Annuity Program to new members after a
55 specified date; amending s. 121.091, F.S., relating to
56 benefits payable under the Florida Retirement System;
57 conforming provisions to changes made by the act;
58 amending s. 121.151, F.S., relating to the investment
59 of retirement funds; conforming provisions to changes
60 made by the act; amending s. 121.35, F.S.; authorizing
61 participants in the optional retirement program for
62 the State University System to enroll in the cash
63 balance plan as of a specified date; amending s.
64 121.4501, F.S., relating to the Florida Retirement
65 System Investment Plan; limiting the ability of
66 members to enroll in the pension plan after a
67 specified date; consolidating provisions relating to
68 past plan elections; providing for certain employees
69 enrolled in the pension or investment plan to transfer
70 to the cash balance plan; providing for the
71 administration of the cash balance plan; revising the
72 education component to include the cash balance plan;
73 making conforming changes; amending s. 121.70, F.S.,
74 relating to legislative purposes for funding
75 retirement benefits; conforming provisions to changes
76 made by the act; amending s. 121.71, F.S., relating to
77 the calculation of contribution rates; conforming
78 provisions to changes made by the act; creating s.
79 121.721, F.S.; establishing contribution rates for the
80 cash balance plan; specifying how interest credit
81 rates are to be calculated; amending s. 121.73, F.S.;
82 expanding the section relating to allocations for
83 disability coverage to also include coverage for
84 members killed in the line of duty; conforming
85 provisions to changes made by the act; amending s.
86 121.74, F.S.; conforming provisions to changes made by
87 the act; amending s. 121.76, F.S.; conforming a
88 reference; amending s. 121.78, F.S.; revising
89 provisions relating to the payment and distribution of
90 contributions to accommodate members of the cash
91 balance plan; amending s. 213.136, F.S.; conforming
92 provisions to changes made by the act; amending ss.
93 238.072, and 413.051, F.S.; conforming cross
94 references; providing that the act fulfils an
95 important state interest; adjusting the required
96 employer contribution rates for the unfunded actuarial
97 liability of the Florida Retirement System for select
98 classes; providing a directive to the Division of Law
99 Revision and Information; requiring the state board to
100 request a determination letter from the Internal
101 Revenue Service; providing an effective date.
102
103 Be It Enacted by the Legislature of the State of Florida:
104
105 Section 1. The Division of Law Revision and Information is
106 directed to redesignate present part III of chapter 121, Florida
107 Statutes, consisting of ss. 121.70-121.78, Florida Statutes, as
108 part IV, and to create a new part III of chapter 121, Florida
109 Statutes, consisting of ss. 121.601 and 121.602, Florida
110 Statutes, to be entitled “Florida Retirement System Cash Balance
111 Plan.”
112 Section 2. Section 121.601, Florida Statutes, is created to
113 read:
114 121.601 Definitions.—As used in this part, the term:
115 (1) “Active member” means a member who is actively employed
116 by a participating employer.
117 (2) “Annuity savings account” means the account maintained
118 for member contributions.
119 (3) “Approved provider” means a private sector company that
120 is selected and approved by the state board to offer annuity
121 products to the cash balance plan.
122 (4) “Cash balance plan” means the Florida Retirement System
123 Cash Balance Plan created under this part.
124 (5) “Covered employment” means employment in a regularly
125 established position as defined in s. 121.021(52).
126 (6) “Covered position” means a position with a covered
127 employer that is eligible for membership in the Florida
128 Retirement System.
129 (7) “De minimis account” means an account containing
130 employer and employee contributions of up to $5,000 made under
131 this chapter.
132 (8) “Electronic means” means telephone transmission if the
133 required information is received on a recorded line, or the
134 Internet if the required information is captured online.
135 (9) “Eligible employee” means an officer or employee, as
136 defined in s. 121.021(11), who:
137 (a) Is a member of, or is eligible for membership in, the
138 Florida Retirement System, including a renewed member of the
139 Florida Retirement System initially enrolled before July 1,
140 2010; or
141 (b) Participates in, or is eligible to participate in, the
142 Senior Management Service Optional Annuity Program established
143 under s. 121.055(6), the State Community College System Optional
144 Retirement Program established under s. 121.051(2)(c), or the
145 State University System Optional Retirement Program established
146 under s. 121.35.
147
148 The term does not include a member participating in the Deferred
149 Retirement Option Program established under s. 121.091(13), a
150 retiree of a state-administered retirement system initially
151 reemployed in a regularly established position on or after July
152 1, 2010, or a compulsory participant of the State University
153 System Optional Retirement Program established under s. 121.35.
154 (10) “Member” or “employee” means an eligible employee who
155 enrolls in the cash balance plan as provided in this section, or
156 a beneficiary or alternate payee of a member or employee.
157 (11) “Member contributions” or “employee contributions”
158 means the sum of all amounts deducted from the salary of a
159 member by his or her employer in accordance with s. 121.71(3)
160 and credited to his or her individual annuity savings account in
161 the cash balance plan, plus any interest credits on such amounts
162 and any contributions specified in s. 121.602(4), (5), and (6).
163 (12) “Normal retirement age” means the date a member
164 attains his or her normal retirement date as provided in this
165 section, or the date a member is vested, whichever is later.
166 (13) “Normal retirement date” means the date a member
167 attains normal retirement age and is vested pursuant to this
168 part.
169 (14) “Quarter” means the 3-month period ending on the last
170 business day of September, December, March, and June of each
171 fiscal year.
172 (15) “Retiree” means a former member of the cash balance
173 plan who has terminated employment and taken a benefit as
174 provided in s. 121.602(8), other than a mandatory distribution
175 of a de minimis account authorized by the state board or a
176 minimum required distribution provided pursuant to s. 401(a) of
177 the Internal Revenue Code.
178 (16) “Retirement annuity account” means the account
179 established for the employer credits of a member.
180 (17) “Terminated” or “termination” occurs when a member
181 ceases all employment relationships with participating employers
182 for 3 calendar months. However, if a member is employed by a
183 participating employer within the next 6 calendar months,
184 termination is deemed not to have occurred. A leave of absence
185 constitutes a continuation of the employment relationship,
186 except that a leave of absence without pay due to disability may
187 constitute termination if such member applies for and is
188 approved for disability retirement in accordance with s.
189 121.602(9). The department or state board may require other
190 evidence of termination as it deems necessary.
191 (18) “Vested” or “vesting” means the guarantee that a
192 member is eligible to receive a future retirement benefit upon
193 completion of the required years of service for the employee’s
194 class of membership even though the member may have terminated
195 covered employment before reaching the normal or early
196 retirement date. Under the cash balance plan, a member is deemed
197 to be vested and to have met the required years of service after
198 completing 5 years of creditable service.
199 Section 3. Section 121.602, Florida Statutes, is created to
200 read:
201 121.602 Florida Retirement System Cash Balance Plan.—
202 (1) CREATION.—The Trustees of the State Board of
203 Administration shall establish a cash balance program called the
204 “Florida Retirement System Cash Balance Plan” for members of the
205 Florida Retirement System under which retirement benefits will
206 be provided for eligible employees who elect to participate in
207 the plan.
208 (a) The plan must be a qualified governmental plan pursuant
209 to ss. 401(a) and 414(d) of the Internal Revenue Code and
210 related regulations. Assets of the plan shall be held in trust
211 for the Florida Retirement System. The employer and employee
212 shall make contributions, as provided in this section and ss.
213 121.571 and 121.71, to the Florida Retirement System Cash
214 Balance Trust Fund for funding the benefits of the plan.
215 (b) The state board shall establish a retirement annuity
216 account for each member of the cash balance plan, which shall be
217 credited with employer credits plus interest credits on the
218 employer credits. The retirement annuity account shall be used
219 to determine the amount of a lump-sum distribution or an annuity
220 benefit for a vested member upon retirement as provided under
221 this part.
222 (c) The state board shall establish an annuity savings
223 account for each member of the plan, which shall be credited
224 with employee contributions plus interest credits on the
225 employee contributions. For a vested member, the annuity savings
226 account shall be used to fund the member’s lump-sum distribution
227 or annuity benefits upon retirement.
228 (d) The design and administration of the plan must comply
229 with all applicable provisions of the Internal Revenue Code. The
230 Legislature may amend the plan to comply with applicable federal
231 laws and regulations.
232 (2) RETIREMENT SERVICE CREDIT; TRANSFER OF BENEFITS.—
233 (a) A member of the pension plan or the investment plan who
234 is employed in a regularly established position with a
235 participating employer may elect to:
236 1. Retain membership in the pension plan or investment
237 plan; or
238 2. Make a one-time transfer to the cash balance plan at any
239 time during his or her active career under the Florida
240 Retirement System in which he or she is earning service credit
241 in an employer-employee relationship consistent with s.
242 121.021(17)(b), excluding leaves of absence without pay. Such
243 election is effective the first day of the month following the
244 receipt of the election by the third-party administrator and is
245 not subject to requirements regarding an employer-employee
246 relationship or receipt of contributions for the eligible
247 employee in the effective month except when the election is
248 received by the administrator. This one-time career transfer is
249 irrevocable, and no other subsequent transfer is allowed.
250 (b) A member who uses the one-time transfer under
251 subparagraph (a)2. to enroll in the cash balance plan may elect
252 to:
253 1. Retain all service credit earned under the pension plan
254 or the investment plan as credited under the Florida Retirement
255 System and is entitled to a deferred benefit upon termination
256 from the pension plan or investment plan. However, the election
257 to enroll in the cash balance plan terminates the active
258 membership of the member in the pension plan or investment plan,
259 and the service of a member who has transferred to the cash
260 balance plan is creditable for purposes of vesting only, and not
261 creditable for purposes of benefit accrual under the pension
262 plan or the investment plan; or
263 2. Elect to transfer a sum representing the present value
264 of the member’s accumulated benefit obligation under the pension
265 plan or the value of the member’s investment plan account to the
266 cash balance plan. Such election is effective the first day of
267 the month following receipt of the election by the third-party
268 administrator. Upon transfer, all service credit earned under
269 the pension plan or investment plan is nullified for purposes of
270 entitlement to a future benefit under the pension plan or
271 investment plan. Any amount transferred, regardless of the
272 original source of the contributions, shall be deemed to be
273 employer credits in the cash balance plan.
274 (c) If the eligible employee elects to transfer his or her
275 accumulated benefit obligation to the cash balance plan under
276 subparagraph (b)2., and:
277 1. The employee is a member of the pension plan, the
278 employee must transfer the present value of the accumulated
279 benefit obligation under the pension plan.
280 a. For purposes of this paragraph, the present value of the
281 member’s accumulated benefit obligation is based upon the
282 member’s estimated creditable service and estimated average
283 final compensation under the pension plan, subject to
284 recalculation under sub-subparagraph b. The actuarial present
285 value of the member’s accumulated benefit obligation is based on
286 the following:
287 (I) The discount rate and other relevant actuarial
288 assumptions used to value the Florida Retirement System Trust
289 Fund at the time the amount to be transferred is determined,
290 consistent with sub-sub-subparagraph (II).
291 (II) The member’s benefit commencement age, based on the
292 member’s estimated creditable service as of the estimate date.
293 (A) Except as provided under sub-sub-sub-subparagraph (B),
294 the benefit commencement age is the younger of the following,
295 which may not be younger than the member’s age as of the
296 estimate date:
297 i. For a member initially enrolled before July 1, 2011, age
298 62 or the age the member would attain if the member completed 30
299 years of service with an employer, assuming that the member
300 worked continuously from the estimate date, and disregarding any
301 vesting requirement that would otherwise apply under the pension
302 plan.
303 ii. For a member enrolled on or after July 1, 2011, age 65
304 or the age the member would attain if the member completed 33
305 years of service with an employer, assuming that the member
306 worked continuously from the estimate date, and disregarding any
307 vesting requirement that would otherwise apply under the pension
308 plan.
309 (B) The benefit commencement age for members of the Special
310 Risk Class and for members of the Special Risk Administrative
311 Support Class entitled to retain the special risk normal
312 retirement date is the younger of the following, which may not
313 be younger than the member’s age as of the estimate date:
314 i. For a member initially enrolled before July 1, 2011, age
315 55 or the age the member would attain if the member completed 25
316 years of service with an employer, assuming that the member
317 worked continuously from the estimate date, and disregarding any
318 vesting requirement that would otherwise apply under the pension
319 plan.
320 ii. For a member enrolled on or after July 1, 2011, age 60
321 or the age the member would attain if the member completed 30
322 years of service with an employer, assuming that the member
323 worked continuously from the estimate date, and disregarding any
324 vesting requirement that would otherwise apply under the pension
325 plan.
326 (III) The calculation disregards vesting requirements and
327 early retirement reduction factors that would otherwise apply
328 under the pension plan.
329 b. The division shall recalculate the amount transferred
330 under sub-subparagraph a. within 60 days after the actual
331 transfer of funds based upon the member’s actual creditable
332 service and actual final average compensation as of the initial
333 date of participation in the cash balance plan. If the
334 recalculated amount differs from the amount transferred by $10
335 or more, the division shall:
336 (I) Transfer from the Florida Retirement System Trust Fund
337 to the member’s account the excess, if any, of the recalculated
338 amount over the previously transferred amount plus any interest
339 from the initial date of transfer to the date of transfer under
340 this subparagraph, based upon the effective annual interest rate
341 equal to the assumed return on the actuarial investment which
342 was used in the most recent actuarial valuation of the system,
343 compounded annually.
344 (II) Transfer, or cause to be transferred, from the
345 member’s account to the Florida Retirement System Trust Fund the
346 excess, if any, of the previously transferred amount over the
347 recalculated amount, plus any interest from the initial date of
348 transfer to the date of transfer under this subparagraph, based
349 upon a 6 percent effective annual interest rate, compounded
350 annually, pro rata based on the member’s allocation under the
351 cash balance plan.
352 c. If contribution adjustments are made due to any employer
353 errors or corrections, including plan corrections, following
354 recalculation of the amount transferred under this subparagraph,
355 the member is entitled to the additional contributions or is
356 responsible for returning any excess contributions resulting
357 from the correction. A return of such erroneous excess pretax
358 contribution by the plan must be made within the period allowed
359 by the Internal Revenue Service. The present value of the
360 member’s accumulated benefit obligation may not be recalculated.
361 2. The employee is a member of the investment plan, the
362 employee must transfer the sum representing the account balance
363 of the investment plan as of the transfer date.
364 a. Upon receipt of the employee contributions from the
365 member’s investment plan account, the contributions shall be
366 credited to the annuity savings account of the member.
367 b. Upon receipt of the employer contributions from the
368 member’s investment plan account, the contributions shall be
369 credited to the retirement annuity account of the member.
370 c. Within 60 days after the transfer date, the third-party
371 administrator shall transfer any residual contributions due to
372 the member of the cash balance plan for the benefit of the
373 member and credited to the retirement annuity account or the
374 annuity savings account of the member, as applicable.
375 d. If contribution adjustments are made due to employer
376 errors or corrections, including plan corrections, following
377 calculation of the amount transferred under this subparagraph,
378 the member is entitled to the additional contributions or shall
379 return any excess contributions resulting from the correction. A
380 return of such erroneous excess pretax contribution by the plan
381 must be made within the period allowed by the Internal Revenue
382 Service.
383 3. As directed by the member, the state board shall
384 transfer the appropriate amounts to the cash balance plan within
385 30 days after the effective date of the member’s participation
386 in the cash balance plan, unless the major financial markets for
387 securities available for a transfer are seriously disrupted by
388 an unforeseen event that causes the suspension of trading on the
389 national securities exchange in the country where the securities
390 were issued. In that event, the 30-day period may be extended by
391 a resolution of the board. Transfers are not commissionable or
392 subject to other fees and may be in the form of securities or
393 cash, as determined by the board. Such securities are valued as
394 of the date of receipt in the member’s account.
395 4. If the state board receives notification from the
396 Internal Revenue Service that this paragraph or any portion of
397 this paragraph will cause the Florida Retirement System, or a
398 portion thereof, to be disqualified for tax purposes under the
399 Internal Revenue Code, the portion that will cause the
400 disqualification does not apply. Upon such notice, the board or
401 the division shall notify the presiding officers of the
402 Legislature.
403 (3) PARTICIPATION; ENROLLMENT.—
404 (a) An eligible employee who is initially employed on or
405 after July 1, 2015, in a covered position eligible to
406 participate in the Special Risk Class and who is earning service
407 credit in an employer-employee relationship that is consistent
408 with s. 121.021(17)(b), excluding leaves of absence without pay,
409 shall be enrolled in the cash balance plan at the commencement
410 of employment.
411 1. The employee must elect to participate in the pension
412 plan, cash balance plan, or investment plan by the last business
413 day of the 8th month following the employee’s month of hire. The
414 employee’s election must be in writing or by electronic means
415 and filed with the third-party administrator.
416 2. If the employee files such election within the
417 prescribed time period, enrollment in the pension plan, cash
418 balance plan, or the investment plan is effective on the 1st day
419 of employment. The retirement contributions paid through the
420 month of the employee plan change shall be transferred to the
421 pension plan, cash balance plan, or investment plan, and,
422 effective the 1st day of the next month, the employer and
423 employee shall pay the applicable contributions based on the
424 employee membership class in the plan.
425 3. If the employee fails to make an election of the cash
426 balance plan or investment plan by the last business day of the
427 8th month following the employee’s month of hire, the employee
428 is deemed to have elected the investment plan and will be
429 defaulted into the investment plan retroactively to the
430 employee’s date of employment.
431 4. The amount of the employee and employer contributions
432 paid before the default to the investment plan shall be
433 transferred to the investment plan and placed in a default fund
434 as designated by the state board. The employee may move the
435 contributions once an account is activated in the investment
436 plan.
437 (b) An eligible employee who is initially employed on or
438 after July 1, 2015, in a covered position eligible to
439 participate in a class other than the Special Risk Class and who
440 is earning service credit in an employer-employee relationship
441 that is consistent with s. 121.021(17)(b), excluding leaves of
442 absence without pay, shall be enrolled in the cash balance plan
443 at the commencement of employment.
444 1. The employee must elect to participate in the cash
445 balance plan or the investment plan by the last business day of
446 the 8th month following the employee’s month of hire. The
447 employee’s election must be in writing or by electronic means
448 and filed with the third-party administrator.
449 2. If the employee files such election within the
450 prescribed time period, enrollment in the cash balance plan or
451 the investment plan is effective on the 1st day of employment.
452 The retirement contributions paid through the month of the
453 employee plan change shall be transferred to the cash balance
454 plan or the investment plan, and, effective the 1st day of the
455 next month, the employer and employee shall pay the applicable
456 contributions based on the employee membership class in the
457 plan.
458 3. If the employee fails to make an election of the cash
459 balance plan or investment plan by the last business day of the
460 8th month following the employee’s month of hire, the employee
461 is deemed to have elected the investment plan and will be
462 defaulted into the investment plan retroactively to the
463 employee’s date of employment.
464 4. The amount of the employee and employer contributions
465 paid before the default to the investment plan shall be
466 transferred to the investment plan and placed in a default fund
467 as designated by the state board. The employee may move the
468 contributions once an account is activated in the investment
469 plan.
470 (c) An employee who becomes eligible to participate in the
471 cash balance plan pursuant to s. 121.051(2)(c)3. or s.
472 121.35(3)(i) may elect to participate in the cash balance plan
473 in lieu of retaining his or her membership in the State
474 Community College System Optional Retirement Program or the
475 State University System Optional Retirement Program.
476 1. The election must be made in writing or by electronic
477 means and filed with the third-party administrator.
478 2. Upon making such election, the employee shall be
479 enrolled as a member of the cash balance plan, the employee’s
480 membership in the Florida Retirement System shall be governed by
481 this part, and the employee’s participation in the State
482 Community College System Optional Retirement Program or the
483 State University System Optional Retirement Program terminates.
484 3. The employee’s enrollment in the cash balance plan is
485 effective on the first day of the month for which a full month’s
486 employer and employee contribution is made to the cash balance
487 plan.
488 (d) A retiree who is initially reemployed in a regularly
489 established position on or after July 1, 2010, is not eligible
490 to be enrolled in renewed membership in the Florida Retirement
491 System except as provided in s. 121.122.
492 (4) CONTRIBUTIONS AND CREDITS.—
493 (a) The employee and employer shall make the required
494 contributions to the cash balance plan based on a percentage of
495 the employee’s gross monthly compensation, as provided in s.
496 121.71.
497 (b) Employee contributions shall be deposited into the
498 annuity savings account of the member pursuant to s. 121.721,
499 and employer contributions shall be deposited into the
500 retirement savings account pursuant to s. 121.721.
501 (c) A member may not make voluntary contributions to the
502 cash balance plan.
503 (d) The state board, acting as a fiduciary to the cash
504 balance plan, must ensure that all plan assets are held in a
505 trust pursuant to s. 401 of the Internal Revenue Code. The
506 fiduciary must ensure that such contributions are allocated as
507 follows:
508 1. The employer and employee contribution portions
509 earmarked for member retirement annuity and annuity savings
510 accounts shall be credited to the appropriate account.
511 2. The employer contribution portion earmarked for
512 administrative and educational expenses shall be transferred to
513 the Florida Retirement System Cash Balance Plan Trust Fund.
514 3. The employer contribution portion earmarked for
515 disability benefits shall be transferred to the Florida
516 Retirement System Trust Fund.
517 4. The employer contribution portions earmarked for
518 amortization of the unfunded actuarial liability of the pension
519 plan and the cash balance plan shall be transferred to the
520 Florida Retirement System Trust Fund.
521 (e) The third-party administrator shall monitor and notify
522 employers of the maximum contribution levels allowed for members
523 under the Internal Revenue Code. If a member contributes to any
524 other tax-deferred plan, the member must ensure that total
525 contributions made to the cash balance plan and to any other
526 such plan do not exceed the federally allowed maximum.
527 (5) ANNUITY SAVINGS ACCOUNT CREDITS.—A member’s annuity
528 savings account is the sum of the member’s mandatory credits
529 plus the interest credits on those credits.
530 (a) The service credits shall be credited as provided in s.
531 121.71 on a monthly basis.
532 (b) The interest credits shall be credited as provided in
533 s. 121.721. The Legislature reserves the right to prospectively
534 change the interest credits.
535 (c) The member’s annuity savings account is vested from the
536 date the employee becomes a member of the cash balance plan.
537 (6) EMPLOYER RETIREMENT ANNUITY CREDITS.—A member’s
538 retirement annuity account is the sum of all employer credits to
539 the account plus the interest credits on those credits.
540 (a) The service credits shall be credited on a monthly
541 basis as provided in s. 121.71.
542 (b) The interest credits shall be credited as provided in
543 s. 121.721. The Legislature expressly reserves the right to
544 prospectively change the interest credits.
545 (7) VESTING REQUIREMENTS.—
546 (a) A member is fully and immediately vested in all
547 employee credits plus interest credits paid to an annuity
548 savings account as provided in subsection (5).
549 (b) A member is vested in all employer credits plus
550 interest credits paid to the retirement annuity account on
551 behalf of the member as provided in subsection (6), upon
552 completion of 5 years of creditable service.
553 1. If a member has not vested in the member’s retirement
554 annuity account at termination, has not withdrawn such member’s
555 annuity savings account, and is reemployed as an eligible
556 employee within 15 years after the member’s most recent
557 termination, such member’s prior years of service, employer
558 credits, and interest credits are restored upon reemployment.
559 2. If a member has not vested in the member’s retirement
560 annuity account at termination and has not withdrawn such
561 member’s annuity savings account, but is not reemployed as an
562 eligible employee within 15 years after the member’s most recent
563 termination, any nonvested employer credits and interest
564 credits, including accompanying service credit, are forfeited.
565 (c) A member is vested in any benefits transferred from the
566 pension plan or investment plan to the cash balance plan upon
567 meeting the vesting requirements of the member’s membership
568 class set forth in s. 121.021(45) or s. 121.4501(6), as
569 applicable. The third-party administrator shall notify the
570 member when the member has satisfied the vesting period.
571 1. If a member has not vested in the benefit transferred
572 from the pension plan or investment plan at termination of
573 employment, has not withdrawn such member’s annuity savings
574 account, and is reemployed as an eligible employee within 15
575 years after such member’s most recent termination, the member’s
576 prior years of service, employer credits, and interest credits
577 are restored upon reemployment.
578 2. If a member is not vested in the benefit transferred
579 from the pension plan or investment plan at termination of
580 employment, has not withdrawn such member’s annuity savings
581 account, and is not reemployed as an eligible employee within 15
582 years after such member’s most recent termination, such member’s
583 prior years of service, employer credits, and interest credits
584 shall be forfeited.
585 (d) If the member elects to receive any of his or her
586 vested annuity savings account upon termination of employment as
587 provided in s. 121.021(39)(a), except for a mandatory
588 distribution of a de minimis account authorized by the state
589 board or a minimum required distribution provided under s.
590 401(a)(9) of the Internal Revenue Code, the member shall forfeit
591 all nonvested retirement annuity credits, interest credits, and
592 accompanying service credit paid on behalf of the member to the
593 cash balance plan.
594 (8) BENEFITS PAYMENTS.—
595 (a) Benefits may not be paid under the cash balance plan
596 unless the member has terminated employment or is deceased and a
597 proper application prescribed by the state board has been filed
598 by the member or beneficiary.
599 (b) If a member elects to receive his or her benefits upon
600 termination of employment, the member must submit a written
601 application or an application by electronic means to the third
602 party administrator indicating his or her preferred benefit
603 payment date and selecting an authorized method of benefit
604 payment as provided in paragraph (d). The member may defer
605 receipt of benefits until he or she chooses to make such
606 application, subject to federal requirements.
607 (c) The state board may cancel an application for
608 retirement benefits if the member or beneficiary fails to timely
609 provide the information and documents required by this chapter
610 and the rules of the board. The state board shall adopt rules
611 establishing procedures for the application for retirement
612 benefits and for the cancellation of such application if the
613 required information or documents are not received.
614 (d) Upon receipt by the third-party administrator of a
615 properly executed application for benefit payments, the total
616 accumulated benefit is payable to the member pro rata across all
617 Florida Retirement System benefit sources as:
618 1. A lump-sum or partial benefit payment to the member;
619 2. A lump-sum direct rollover benefit payment whereby all
620 accrued benefits, plus interest credits, are paid from the
621 member’s account directly to the custodian of an eligible
622 retirement plan, as defined in s. 402(c)(8)(B) of the Internal
623 Revenue Code, on behalf of the member;
624 3. An annuity with a guaranteed benefit under any one of
625 the options offered under the investment plan; or
626 4. A combination of 1.-3.
627 (e) The benefit payment method selected by the member or
628 beneficiary, and the retirement of the member, are final and
629 irrevocable at the time a benefit payment is cashed, deposited,
630 or transferred to another financial institution. Any additional
631 service that remains unclaimed at retirement may not be claimed
632 or purchased, and the type of retirement may not be changed,
633 except that if a member recovers from a disability, the member
634 may subsequently request benefits under subsection (9).
635 (f) Benefits in the form of vested accumulations as
636 described in subsection (7) are payable in accordance with all
637 of the following terms and conditions:
638 1. Benefits are payable only to a member, an alternate
639 payee of a qualified domestic relations order, or a beneficiary.
640 2. Benefits shall be paid by the third-party administrator
641 or designated approved providers in accordance with the law, the
642 contracts, and any applicable state board rule or policy.
643 3. The member must be terminated from all employment as
644 provided in s. 121.021(39).
645 4. Benefit payments may not be made until the member has
646 been terminated for 3 calendar months.
647 5. If a member or former member of the Florida Retirement
648 System receives an invalid benefit payment, such person must
649 repay the full amount within 90 days after receipt of final
650 notification by the state board or the third-party administrator
651 that the benefit payment was invalid, or, in lieu of repayment,
652 the member must terminate employment from all participating
653 employers.
654 a. If the member or former member fails to repay the full
655 invalid benefit payment within 90 days after receipt of final
656 notification, the person may be deemed retired from the cash
657 balance plan by the board and is subject to s. 121.122. If such
658 person is deemed retired, any joint and several liability set
659 out in s. 121.091(9)(d)2. is void, and the board, the
660 department, or the employing agency is not liable for interest
661 credits on contributions that have not been deposited into the
662 person’s cash balance account in the cash balance plan, pending
663 resolution of the invalid benefit payment.
664 b. The member or former member who has been deemed retired
665 or who has been determined by the board to have taken an invalid
666 benefit payment may appeal the agency decision through the
667 complaint process under s. 121.4501(8)(g). As used in this
668 subparagraph, the term “invalid benefit payment” means any
669 payment from an account in the cash balance plan which is taken
670 in violation of this section or s. 121.091(9).
671 (g) Benefits, including the annuity savings account, are
672 not payable under the cash balance plan for employee hardships,
673 unforeseeable emergencies, loans, medical expenses, educational
674 expenses, purchase of a principal residence, payments necessary
675 to prevent eviction from or foreclosure on an employee’s
676 principal residence, or any other reason except a requested
677 distribution for retirement, a mandatory de minimis account
678 distribution authorized by the third-party administrator, or a
679 required minimum distribution provided pursuant to the Internal
680 Revenue Code.
681 (h) The state board may cash out a de minimis account of a
682 member who has been terminated from Florida Retirement System
683 employment for a minimum of 6 calendar months. Such cash-out
684 must be a complete lump-sum liquidation of the vested account
685 balance, subject to the Internal Revenue Code, or a lump-sum
686 direct rollover distribution paid directly to the custodian of
687 an eligible retirement plan, as defined by the code, on behalf
688 of the member.
689 (i) If any instrument issued for the payment of retirement
690 benefits under this section is not presented for payment within
691 180 days after the last day of the month in which it was
692 originally issued, the third-party administrator or other
693 authorized agent of the state board shall cancel the instrument
694 and credit the amount of the instrument to the Florida
695 Retirement System Cash Balance Plan Trust Fund. Any amounts so
696 credited to the trust fund, not including earnings thereon, are
697 payable upon proper application as provided in this section
698 within 10 years after the last day of the month in which the
699 financial instrument was originally issued, after which time
700 such amounts and any earnings attributable to employer
701 retirement annuity credits are forfeited. Any forfeited amounts
702 are assets of the trust fund and not subject to chapter 717.
703 (j) A member may not receive a distribution of employee
704 contributions if a pending qualified domestic relations order is
705 filed against the member’s cash balance plan account.
706 (k) The benefits payable to any person under the cash
707 balance plan, and any contributions and credits accumulated
708 under the plan, are not subject to assignment, execution,
709 attachment, or any legal process, except for qualified domestic
710 relations orders, income deduction orders as provided in s.
711 61.1301, and federal income tax levies.
712 (9) DISABILITY BENEFITS.—
713 (a) For any member of the cash balance plan who becomes
714 totally and permanently disabled, benefits must be paid in
715 accordance with the following:
716 1. The member may elect to receive benefits pursuant to s.
717 121.591(2); or
718 2. The member may elect to receive the vested balance of
719 his or her cash balance annuity savings account and the vested
720 balance of his or her retirement annuity account.
721 (b) Pursuant to s. 121.73, an employer shall contribute a
722 percentage of gross monthly compensation to provide disability
723 coverage for active members in the cash balance plan.
724 (10) DEATH BENEFITS.—Under the cash balance plan:
725 (a) Survivor benefits of a deceased member are payable in
726 accordance with the following terms and conditions:
727 1. To the extent vested, benefits are payable only to a
728 member’s beneficiary or beneficiaries as designated by the
729 member as provided in subsection (11).
730 2. Benefits shall be paid by the third-party administrator
731 or designated approved providers in accordance with the law, the
732 contracts, and any applicable rule or policy of the state board.
733 (b) In the event of a member’s death, all vested
734 accumulations as described in subsections (5) and (6), less
735 withholding taxes remitted to the Internal Revenue Service,
736 shall be distributed as provided in paragraph (c) or as
737 described in subsection (8) as if the member retired on the date
738 of death. No other death benefits are available for survivors of
739 members, except for benefits, or coverage for benefits, as are
740 otherwise provided by law or separately provided by the
741 employer, at the employer’s discretion.
742 (c) Upon receipt by the third-party administrator of a
743 properly executed application for the distribution of benefits,
744 the total accumulated benefit is payable by the administrator to
745 the member’s surviving beneficiary or beneficiaries as:
746 1. A lump-sum distribution payable to the beneficiary or
747 beneficiaries as provided in subsection (11);
748 2. An eligible rollover distribution, if allowed, on behalf
749 of the surviving beneficiary of a deceased member, whereby all
750 accrued benefits, plus interest credits, are paid from the
751 deceased member’s account directly to the custodian of an
752 eligible retirement plan, as described in s. 402(c)(8)(B) of the
753 Internal Revenue Code, on behalf of the surviving beneficiary;
754 3. An annuity with a guaranteed benefit under any one of
755 the options offered under the investment plan; or
756 4. A combination of 1.-3.
757 (d) Notwithstanding any other provision of this chapter:
758 1. The surviving spouse of any member killed in the line of
759 duty may receive a monthly benefit equal to one-half of the
760 monthly salary that was received by the member at the time of
761 death for the rest of the surviving spouse’s lifetime if all
762 service and interest credits that have accumulated in the
763 member’s accounts are transferred to the pension plan; or, if
764 the member had vested, the surviving spouse may elect to receive
765 a benefit as provided in paragraph (c). Benefits provided by
766 this paragraph supersede any other distribution that may have
767 been provided by the member’s designation of beneficiary.
768 2. If the surviving spouse of a member killed in the line
769 of duty dies, the monthly payments that would have been payable
770 to the surviving spouse had the surviving spouse lived shall be
771 paid for the use and benefit of the member’s child or children
772 younger than 18 years of age and unmarried until the 18th
773 birthday of the member’s youngest child.
774 3. If a member killed in the line of duty leaves no
775 surviving spouse but is survived by a child or children younger
776 than 18 years of age, the benefits normally payable to a
777 surviving spouse under subparagraph 1. shall be paid for the use
778 and benefit of the member’s child or children younger than 18
779 years of age and unmarried until the 18th birthday of the
780 member’s youngest child.
781
782 This paragraph does not abrogate other applicable provisions of
783 state or federal law providing for payment of death benefits.
784 (11) DESIGNATION OF BENEFICIARIES.—Section 121.4501(20)
785 governs the designation of beneficiaries for the cash balance
786 plan.
787 (12) PURCHASE OF CREDITABLE SERVICE.—
788 (a) Creditable service of a member includes military
789 service in the Armed Forces of the United States as provided
790 under s. 121.111(1).
791 (b) A member may purchase creditable service for up to 2
792 work years of authorized leaves of absence, including any leaves
793 of absence covered under the Family Medical Leave Act as
794 provided under s. 121.121.
795 (c) Except as provided in this subsection, no other service
796 for periods of employment may be purchased by or on behalf of a
797 member.
798 (13) RETIREE HEALTH INSURANCE SUBSIDY.—All eligible
799 employees who are members of the cash balance plan are eligible
800 to receive the retiree health insurance subsidy, subject to s.
801 112.363.
802 (14) SOCIAL SECURITY COVERAGE.—Social security coverage
803 shall be provided for all eligible employees who become members
804 of the cash balance plan. Any modification of the present
805 agreement with the Social Security Administration, or referendum
806 required under the Social Security Act, for the purpose of
807 providing social security coverage for a member shall be
808 requested by the state agency in compliance with the applicable
809 provisions of the Social Security Act. However, retroactive
810 social security coverage for service with the employer before
811 December 1, 1970, may not be provided for a member who was not
812 covered under the agreement as of November 30, 1970.
813 (15) CASH BALANCE PLAN EDUCATION.—Section 121.4501(10)
814 governs the education of members who are in the cash balance
815 plan.
816 (16) MEMBER INFORMATION REQUIREMENTS.—Each quarter the
817 state board shall provide each member of the cash balance plan a
818 quarterly statement of benefits which provides the member with
819 basic data about the member’s retirement account. At a minimum,
820 the statement must include:
821 (a) The member’s accrued service credit;
822 (b) The member’s balance of the retirement annuity account
823 and the annuity savings account at the close of the current
824 quarter and previous quarter;
825 (c) Itemized account contributions for the quarter;
826 (d) Any posted interest credits earned on the account;
827 (e) The amount of the account in which the member is fully
828 vested; and
829 (f) The amount of the account in which the member is not
830 fully vested.
831 (17) FEDERAL REQUIREMENTS.—
832 (a) This section shall be construed, and the cash balance
833 plan shall be administered, so as to comply with the Internal
834 Revenue Code and specifically with plan qualification
835 requirements imposed on governmental plans under 26 U.S.C. s.
836 401(a) of the code. The state board may adopt rules reasonably
837 necessary to establish or maintain the qualified status of the
838 cash balance plan under the Internal Revenue Code and to
839 implement and administer the plan in compliance with the code
840 and as designated under this part; however, the state board may
841 not adopt any rule that makes a substantive change to the cash
842 balance plan as designed under this part.
843 (b) Any provision of this chapter which is susceptible to
844 more than one construction shall be interpreted in favor of the
845 construction most likely to satisfy requirements imposed by s.
846 401(a) of the Internal Revenue Code.
847 (c) Credits payable under this section for any limitation
848 year may not exceed the maximum amount allowable for qualified
849 cash balance plans under applicable provisions of the Internal
850 Revenue Code. If an employee who is enrolled in the cash balance
851 plan participates in any other plan that is maintained by the
852 participating employer, benefits that accrue under the cash
853 balance plan are considered primary for any aggregate limitation
854 applicable under s. 415 of the code.
855 (18) CASH BALANCE PLAN ADMINISTRATION.—Section 121.4501(8)
856 also governs the administration of the cash balance plan.
857 (19) STATEMENT OF FIDUCIARY STANDARDS AND
858 RESPONSIBILITIES.—Investment of cash balance plan assets shall
859 be made for the sole interest and exclusive purpose of providing
860 benefits to members and beneficiaries and defraying reasonable
861 expenses of administering the plan. The plan’s assets shall be
862 invested on behalf of the plan members with the care, skill, and
863 diligence that a prudent person acting in a like manner would
864 undertake. The performance of the investment duties specified in
865 this subsection must comply with the fiduciary standards set
866 forth in the Employee Retirement Income Security Act of 1974 at
867 29 U.S.C. s. 1104(a)(1)(A)-(C). In case of conflict with other
868 provisions of law authorizing investments, the investment and
869 fiduciary standards specified in this subsection prevail.
870 (20) ACTUARIAL STUDY.—Pursuant to s. 121.031, an annual
871 actuarial valuation and appraisal of the liability of the cash
872 balance plan shall be conducted, and the required credits
873 necessary to discharge any liability and maintain the plan on an
874 actuarial reserve basis shall be provided to the Legislature by
875 December 31 before the next legislative session. Such study
876 shall be conducted by a qualified actuary employed or retained
877 by the state board.
878 (21) INVESTMENT ADVISORY COUNCIL.—The Investment Advisory
879 Council, created pursuant to s. 215.444, shall make
880 recommendations to the board regarding investment policy,
881 strategy, and procedures for the cash balance plan.
882 (22) INVESTMENT POLICY STATEMENT.—In making investments for
883 the cash balance plan pursuant to ss. 215.44-215.53, the board
884 may not make investments that are not in conformance with the
885 Florida Retirement System Cash Balance Plan Investment Policy
886 Statement (IPS) as developed by the executive director and
887 approved by the board. The IPS must, at a minimum, include the
888 investment objectives of the Cash Balance Plan Trust Fund, types
889 of securities in which the board may invest, and evaluation
890 criteria for measuring the investment performance of the fund.
891 (a) The executive director of the board may present
892 recommended changes to the IPS, as necessary, for the board’s
893 approval.
894 (b) The executive director shall first present the proposed
895 IPS and any subsequent recommended changes to the approved IPS
896 to the Investment Advisory Council for review. The council shall
897 present the results of its review to the board before the
898 board’s final approval of the IPS or changes in the IPS.
899 Section 4. Paragraph (b) of subsection (2) of section
900 112.363, Florida Statutes, is amended to read:
901 112.363 Retiree health insurance subsidy.—
902 (2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE SUBSIDY.—
903 (b) For purposes of this section, a person is deemed
904 retired from a state-administered retirement system when he or
905 she terminates employment with all employers participating in
906 the Florida Retirement System as described in s. 121.021(39)
907 and:
908 1. For a member of the investment plan established under
909 part II of chapter 121, the member participant meets the age or
910 service requirements to qualify for normal retirement as set
911 forth in s. 121.021(29) and meets the definition of retiree in
912 s. 121.4501(2).
913 2. For a member of the Florida Retirement System pension
914 plan established under part I of chapter 121, or an any employee
915 who maintains creditable service under both the pension plan and
916 the investment plan or under both the pension plan and the cash
917 balance plan, the member begins drawing retirement benefits from
918 the pension plan.
919 3. For a member of the cash balance plan established under
920 part III of chapter 121, the member meets the age or service
921 requirements to qualify for normal retirement as set forth in s.
922 121.021(29) and meets the definition of retiree in s. 121.601.
923 4. For a member of both the investment plan and the cash
924 balance plan, the member meets the definition of retiree in s.
925 121.601 and begins drawing benefits from the cash balance plan.
926 Section 5. Paragraph (h) of subsection (3) of section
927 121.011, Florida Statutes, is amended to read:
928 121.011 Florida Retirement System.—
929 (3) PRESERVATION OF RIGHTS.—
930 (h) Effective July 1, 2011, the retirement system shall
931 require employer and employee contributions as provided in s.
932 121.071 and part IV III of this chapter.
933 Section 6. Section 121.012, Florida Statutes, is amended to
934 read:
935 121.012 Inclusive provisions.—The provisions of part I of
936 this chapter apply shall be applicable to parts II, and III, and
937 IV to the extent such provisions are not inconsistent with, or
938 duplicative of, the provisions of parts II, and III, and IV.
939 Section 7. Subsection (3) of section 121.021, Florida
940 Statutes, is amended to read:
941 121.021 Definitions.—The following words and phrases as
942 used in this chapter have the respective meanings set forth
943 unless a different meaning is plainly required by the context:
944 (3) “Florida Retirement System” or “system” means the
945 general retirement system established by this chapter,
946 including, but not limited to:,
947 (a) The defined benefit program administered under this
948 part, referred to as the “Florida Retirement System Pension
949 Plan” or “pension plan,”; and
950 (b) The defined contribution program administered under
951 part II of this chapter, referred to as the “Florida Retirement
952 System Investment Plan” or “investment plan.”; and
953 (c) The cash balance program established under part III of
954 this chapter, referred to as the “Florida Retirement System Cash
955 Balance Plan” or “cash balance plan.”
956 Section 8. Paragraph (c) of subsection (2) of section
957 121.051, Florida Statutes, is amended, present subsections (3)
958 through (9) of that section are redesignated as subsections (4)
959 through (10), and a new subsection (3) is added to that section,
960 to read:
961 121.051 Participation in the system.—
962 (2) OPTIONAL PARTICIPATION.—
963 (c) Employees of public community colleges or charter
964 technical career centers sponsored by public community colleges,
965 designated in s. 1000.21(3), who are members of the Regular
966 Class of the Florida Retirement System and who comply with the
967 criteria set forth in this paragraph and s. 1012.875 may, in
968 lieu of participating in the Florida Retirement System, elect to
969 withdraw from the system altogether and participate in the State
970 Community College System Optional Retirement Program provided by
971 the employing agency under s. 1012.875.
972 1.a. Through June 30, 2001, the cost to the employer for
973 benefits under the optional retirement program equals the normal
974 cost portion of the employer retirement contribution which would
975 be required if the employee were a member of the pension plan’s
976 Regular Class, plus the portion of the contribution rate
977 required by s. 112.363(8) which would otherwise be assigned to
978 the Retiree Health Insurance Subsidy Trust Fund.
979 b. Effective July 1, 2001, through June 30, 2011, each
980 employer shall contribute on behalf of each member of the
981 optional program an amount equal to 10.43 percent of the
982 employee’s gross monthly compensation. The employer shall deduct
983 an amount for the administration of the program.
984 c. Effective July 1, 2011, through June 30, 2012, each
985 member shall contribute an amount equal to the employee
986 contribution required under s. 121.71(3). The employer shall
987 contribute on behalf of each program member an amount equal to
988 the difference between 10.43 percent of the employee’s gross
989 monthly compensation and the employee’s required contribution
990 based on the employee’s gross monthly compensation.
991 d. Effective July 1, 2012, each member shall contribute an
992 amount equal to the employee contribution required under s.
993 121.71(3). The employer shall contribute on behalf of each
994 program member an amount equal to the difference between 8.15
995 percent of the employee’s gross monthly compensation and the
996 employee’s required contribution based on the employee’s gross
997 monthly compensation.
998 e. The employer shall contribute an additional amount to
999 the Florida Retirement System Trust Fund equal to the unfunded
1000 actuarial accrued liability portion of the Regular Class
1001 contribution rate.
1002 2. The decision to participate in the optional retirement
1003 program is irrevocable as long as the employee holds a position
1004 eligible for participation, except as provided in subparagraph
1005 3. Any service creditable under the Florida Retirement System is
1006 retained after the member withdraws from the system; however,
1007 additional service credit in the system may not be earned while
1008 a member of the optional retirement program.
1009 3. Effective July 1, 2003, through June 30, 2015, an
1010 employee who has elected to participate in the optional
1011 retirement program shall have one opportunity, at the employee’s
1012 discretion, to transfer from the optional retirement program to
1013 the pension plan under this part of the Florida Retirement
1014 System or to the investment plan established under part II of
1015 this chapter, subject to the terms of the applicable optional
1016 retirement program contracts. Except as provided in subsection
1017 (3), an employee participating in the optional retirement
1018 program on or after July 1, 2015, is not eligible to transfer to
1019 the Florida Retirement System.
1020 a. If the employee chooses to move to the investment plan,
1021 any contributions, interest, and earnings creditable to the
1022 employee under the optional retirement program are retained by
1023 the employee in the optional retirement program, and the
1024 applicable provisions of s. 121.4501(4) govern the election.
1025 b. If the employee chooses to move to the pension plan of
1026 the Florida Retirement System, the employee shall receive
1027 service credit equal to his or her years of service under the
1028 optional retirement program.
1029 (I) The cost for such credit is the amount representing the
1030 present value of the employee’s accumulated benefit obligation
1031 for the affected period of service. The cost shall be calculated
1032 as if the benefit commencement occurs on the first date the
1033 employee becomes eligible for unreduced benefits, using the
1034 discount rate and other relevant actuarial assumptions that were
1035 used to value the Florida Retirement System Pension Plan
1036 liabilities in the most recent actuarial valuation. The
1037 calculation must include any service already maintained under
1038 the pension plan in addition to the years under the optional
1039 retirement program. The present value of any service already
1040 maintained must be applied as a credit to total cost resulting
1041 from the calculation. The division must ensure that the transfer
1042 sum is prepared using a formula and methodology certified by an
1043 enrolled actuary.
1044 (II) The employee shall must transfer from his or her
1045 optional retirement program account and from other employee
1046 moneys as necessary, a sum representing the present value of the
1047 employee’s accumulated benefit obligation immediately following
1048 the time of such movement, determined assuming that attained
1049 service equals the sum of service in the pension plan and
1050 service in the optional retirement program.
1051 4. Participation in the optional retirement program is
1052 limited to employees who satisfy the following eligibility
1053 criteria:
1054 a. The employee is otherwise eligible for membership or
1055 renewed membership in the Regular Class of the Florida
1056 Retirement System, as provided in s. 121.021(11) and (12) or s.
1057 121.122.
1058 b. The employee is employed in a full-time position
1059 classified in the Accounting Manual for Florida’s Public
1060 Community Colleges as:
1061 (I) Instructional; or
1062 (II) Executive Management, Instructional Management, or
1063 Institutional Management and the community college determines
1064 that recruiting to fill a vacancy in the position is to be
1065 conducted in the national or regional market, and the duties and
1066 responsibilities of the position include the formulation,
1067 interpretation, or implementation of policies, or the
1068 performance of functions that are unique or specialized within
1069 higher education and that frequently support the mission of the
1070 community college.
1071 c. The employee is employed in a position not included in
1072 the Senior Management Service Class of the Florida Retirement
1073 System as described in s. 121.055.
1074 5. Members of the program are subject to the same
1075 reemployment limitations, renewed membership provisions, and
1076 forfeiture provisions applicable to regular members of the
1077 Florida Retirement System under ss. 121.091(9), 121.122, and
1078 121.091(5), respectively. A member who receives a program
1079 distribution funded by employer and required employee
1080 contributions is deemed to be retired from a state-administered
1081 retirement system if the member is subsequently employed with an
1082 employer that participates in the Florida Retirement System.
1083 6. Eligible community college employees are compulsory
1084 members of the Florida Retirement System until, pursuant to s.
1085 1012.875, a written election to withdraw from the system and
1086 participate in the optional retirement program is filed with the
1087 program administrator and received by the division.
1088 a. A community college employee whose program eligibility
1089 results from initial employment shall be enrolled in the
1090 optional retirement program retroactive to the first day of
1091 eligible employment. The employer and employee retirement
1092 contributions paid through the month of the employee plan change
1093 shall be transferred to the community college to the employee’s
1094 optional program account, and, effective the first day of the
1095 next month, the employer shall pay the applicable contributions
1096 based upon subparagraph 1.
1097 b. A community college employee whose program eligibility
1098 is due to the subsequent designation of the employee’s position
1099 as one of those specified in subparagraph 4., or due to the
1100 employee’s appointment, promotion, transfer, or reclassification
1101 to a position specified in subparagraph 4., must be enrolled in
1102 the program on the first day of the first full calendar month
1103 that such change in status becomes effective. The employer and
1104 employee retirement contributions paid from the effective date
1105 through the month of the employee plan change must be
1106 transferred to the community college to the employee’s optional
1107 program account, and, effective the first day of the next month,
1108 the employer shall pay the applicable contributions based upon
1109 subparagraph 1.
1110 7. Effective July 1, 2003, through December 31, 2008, any
1111 member of the optional retirement program who has service credit
1112 in the pension plan of the Florida Retirement System for the
1113 period between his or her first eligibility to transfer from the
1114 pension plan to the optional retirement program and the actual
1115 date of transfer may, during employment, transfer to the
1116 optional retirement program a sum representing the present value
1117 of the accumulated benefit obligation under the defined benefit
1118 retirement program for the period of service credit. Upon
1119 transfer, all service credit previously earned under the pension
1120 plan during this period is nullified for purposes of entitlement
1121 to a future benefit under the pension plan.
1122 (3) OPTIONAL PLAN MEMBERSHIP IN FLORIDA RETIREMENT SYSTEM.—
1123 (a) Effective July 1, 2015, all eligible employees, except
1124 those eligible to withdraw from the Florida Retirement System
1125 under s. 121.052(3)(d) or s. 121.055(1)(b)2. or those eligible
1126 for optional retirement programs under s. 121.051(1)(a), s.
1127 121.051(2)(c), or s. 121.35, who initially enrolled on or after
1128 July 1, 2015, are not eligible to enroll in the pension plan.
1129 (b) Employees eligible to withdraw from the Florida
1130 Retirement System under s. 121.052(3)(d) or s. 121.055(1)(b)2.
1131 may withdraw from the system or participate in the investment
1132 plan or the cash balance plan as provided under those sections.
1133 Employees eligible for optional retirement programs under s.
1134 121.051(2)(c) or s. 121.35 may participate in the optional
1135 retirement program, the investment plan, or the cash balance
1136 plan as provided under those sections. Eligible employees
1137 required to participate in the optional retirement program under
1138 s. 121.35 pursuant to s. 121.051(1)(a) must elect to participate
1139 in the investment plan or the cash balance plan if employed in a
1140 position not eligible for the optional retirement program.
1141 Section 9. Paragraph (c) of subsection (3) of section
1142 121.052, Florida Statutes, is amended to read:
1143 121.052 Membership class of elected officers.—
1144 (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July
1145 1, 1990, participation in the Elected Officers’ Class shall be
1146 compulsory for elected officers listed in paragraphs (2)(a)-(d)
1147 and (f) assuming office on or after said date, unless the
1148 elected officer elects membership in another class or withdraws
1149 from the Florida Retirement System as provided in paragraphs
1150 (3)(a)-(d):
1151 (c) Before July 1, 2015, an any elected officer may, within
1152 6 months after assuming office, or within 6 months after this
1153 act becomes a law for serving elected officers, elect membership
1154 in the Senior Management Service Class as provided in s. 121.055
1155 in lieu of membership in the Elected Officers’ Class. Any Such
1156 election does not affect made by a county elected officer shall
1157 have no effect upon the statutory limit on the number of
1158 nonelective full-time positions that may be designated by a
1159 local agency employer for inclusion in the Senior Management
1160 Service Class under s. 121.055(1)(b)1.
1161 Section 10. Paragraph (f) of subsection (1) and paragraph
1162 (c) of subsection (6) of section 121.055, Florida Statutes, are
1163 amended to read:
1164 121.055 Senior Management Service Class.—There is hereby
1165 established a separate class of membership within the Florida
1166 Retirement System to be known as the “Senior Management Service
1167 Class,” which shall become effective February 1, 1987.
1168 (1)
1169 (f) Effective July 1, 1997, through June 30, 2015:
1170 1. Except as provided in subparagraphs subparagraph 3. and
1171 4., an elected state officer eligible for membership in the
1172 Elected Officers’ Class under s. 121.052(2)(a), (b), or (c) who
1173 elects membership in the Senior Management Service Class under
1174 s. 121.052(3)(c) may, within 6 months after assuming office or
1175 within 6 months after this act becomes a law for serving elected
1176 state officers, elect to participate in the Senior Management
1177 Service Optional Annuity Program, as provided in subsection (6),
1178 in lieu of membership in the Senior Management Service Class.
1179 2. Except as provided in subparagraphs subparagraph 3. and
1180 4., an elected officer of a local agency employer eligible for
1181 membership in the Elected Officers’ Class under s. 121.052(2)(d)
1182 who elects membership in the Senior Management Service Class
1183 under s. 121.052(3)(c) may, within 6 months after assuming
1184 office, or within 6 months after this act becomes a law for
1185 serving elected officers of a local agency employer, elect to
1186 withdraw from the Florida Retirement System, as provided in
1187 subparagraph (b)2., in lieu of membership in the Senior
1188 Management Service Class.
1189 3. A retiree of a state-administered retirement system who
1190 is initially reemployed in a regularly established position on
1191 or after July 1, 2010, as an elected official eligible for the
1192 Elected Officers’ Class may not be enrolled in renewed
1193 membership in the Senior Management Service Class or in the
1194 Senior Management Service Optional Annuity Program as provided
1195 in subsection (6), and may not withdraw from the Florida
1196 Retirement System as a renewed member as provided in
1197 subparagraph (b)2., as applicable, in lieu of membership in the
1198 Senior Management Service Class.
1199 4. On or after July 1, 2015, an elected officer eligible
1200 for membership in the Elected Officers’ Class may not be
1201 enrolled in the Senior Management Service Class or in the Senior
1202 Management Service Optional Annuity Program except as provided
1203 in subsection (6).
1204 (6)
1205 (c) Participation.—
1206 1. An eligible employee who is employed on or before
1207 February 1, 1987, may elect to participate in the optional
1208 annuity program in lieu of participating in the Senior
1209 Management Service Class. Such election must be made in writing
1210 and filed with the department and the personnel officer of the
1211 employer on or before May 1, 1987. An eligible employee who is
1212 employed on or before February 1, 1987, and who fails to make an
1213 election to participate in the optional annuity program by May
1214 1, 1987, shall be deemed to have elected membership in the
1215 Senior Management Service Class.
1216 2. Except as provided in subparagraph 6., an employee who
1217 becomes eligible to participate in the optional annuity program
1218 by reason of initial employment commencing after February 1,
1219 1987, may, within 90 days after the date of commencing
1220 employment, elect to participate in the optional annuity
1221 program. Such election must be made in writing and filed with
1222 the personnel officer of the employer. An eligible employee who
1223 does not within 90 days after commencing employment elect to
1224 participate in the optional annuity program shall be deemed to
1225 have elected membership in the Senior Management Service Class.
1226 3. A person who is appointed to a position in the Senior
1227 Management Service Class and who is a member of an existing
1228 retirement system or the Special Risk or Special Risk
1229 Administrative Support Classes of the Florida Retirement System
1230 may elect to remain in such system or class in lieu of
1231 participating in the Senior Management Service Class or optional
1232 annuity program. Such election must be made in writing and filed
1233 with the department and the personnel officer of the employer
1234 within 90 days after such appointment. An eligible employee who
1235 fails to make an election to participate in the existing system,
1236 the Special Risk Class of the Florida Retirement System, the
1237 Special Risk Administrative Support Class of the Florida
1238 Retirement System, or the optional annuity program shall be
1239 deemed to have elected membership in the Senior Management
1240 Service Class.
1241 4. Except as provided in subparagraph 5., an employee’s
1242 election to participate in the optional annuity program is
1243 irrevocable if the employee continues to be employed in an
1244 eligible position and continues to meet the eligibility
1245 requirements set forth in this paragraph.
1246 5. Effective from July 1, 2002, through September 30, 2002,
1247 an active employee in a regularly established position who has
1248 elected to participate in the Senior Management Service Optional
1249 Annuity Program has one opportunity to choose to move from the
1250 Senior Management Service Optional Annuity Program to the
1251 Florida Retirement System Pension Plan.
1252 a. The election must be made in writing and must be filed
1253 with the department and the personnel officer of the employer
1254 before October 1, 2002, or, in the case of an active employee
1255 who is on a leave of absence on July 1, 2002, within 90 days
1256 after the conclusion of the leave of absence. This election is
1257 irrevocable.
1258 b. The employee shall receive service credit under the
1259 pension plan equal to his or her years of service under the
1260 Senior Management Service Optional Annuity Program. The cost for
1261 such credit is the amount representing the present value of that
1262 employee’s accumulated benefit obligation for the affected
1263 period of service.
1264 c. The employee must transfer the total accumulated
1265 employer contributions and earnings on deposit in his or her
1266 Senior Management Service Optional Annuity Program account. If
1267 the transferred amount is not sufficient to pay the amount due,
1268 the employee must pay a sum representing the remainder of the
1269 amount due. The employee may not retain any employer
1270 contributions or earnings from the Senior Management Service
1271 Optional Annuity Program account.
1272 6. A retiree of a state-administered retirement system who
1273 is initially reemployed on or after July 1, 2010, may not renew
1274 membership in the Senior Management Service Optional Annuity
1275 Program.
1276 7. Effective July 1, 2015, the Senior Management Service
1277 Optional Annuity Program is closed to new members. Members
1278 enrolled in the program before July 1, 2015, may retain their
1279 membership in the program.
1280 Section 11. Paragraph (d) of subsection (9) of section
1281 121.091, Florida Statutes, is amended to read:
1282 121.091 Benefits payable under the system.—Benefits may not
1283 be paid under this section unless the member has terminated
1284 employment as provided in s. 121.021(39)(a) or begun
1285 participation in the Deferred Retirement Option Program as
1286 provided in subsection (13), and a proper application has been
1287 filed in the manner prescribed by the department. The department
1288 may cancel an application for retirement benefits when the
1289 member or beneficiary fails to timely provide the information
1290 and documents required by this chapter and the department’s
1291 rules. The department shall adopt rules establishing procedures
1292 for application for retirement benefits and for the cancellation
1293 of such application when the required information or documents
1294 are not received.
1295 (9) EMPLOYMENT AFTER RETIREMENT; LIMITATION.—
1296 (d) This subsection applies to a retiree retirees, as
1297 defined in s. 121.4501(2), of the Florida Retirement System
1298 Investment Plan and s. 121.601 of the Florida Retirement System
1299 Cash Balance Plan, subject to the following conditions:
1300 1. A retiree may not be reemployed with an employer
1301 participating in the Florida Retirement System until such person
1302 has been retired for 6 calendar months.
1303 2. A retiree employed in violation of this subsection and
1304 an employer that employs or appoints such person are jointly and
1305 severally liable for reimbursement of any benefits paid to the
1306 retirement trust fund from which the benefits were paid. The
1307 employer must have a written statement from the retiree that he
1308 or she is not retired from a state-administered retirement
1309 system.
1310 Section 12. Section 121.151, Florida Statutes, is amended
1311 to read:
1312 121.151 Investments.—The Board of Administration, created
1313 by authority of the State Constitution, shall invest and
1314 reinvest available funds of the System Trust Fund and the
1315 Florida Retirement System Cash Balance Plan Trust Fund in
1316 accordance with the provisions of ss. 215.44-215.53.
1317 Section 13. Paragraph (c) of subsection (3) of section
1318 121.35, Florida Statutes, is amended to read:
1319 121.35 Optional retirement program for the State University
1320 System.—
1321 (3) ELECTION OF OPTIONAL PROGRAM.—
1322 (c) An Any employee who becomes eligible to participate in
1323 the optional retirement program on or after January 1, 1993,
1324 shall be a compulsory participant of the program unless such
1325 employee elects membership in the Florida Retirement System.
1326 Such election must shall be made in writing and filed with the
1327 personnel officer of the employer. An Any eligible employee who
1328 fails to make such election within the prescribed time period
1329 shall be deemed to have elected to participate in the optional
1330 retirement program.
1331 1. An Any employee whose optional retirement program
1332 eligibility results from initial employment before July 1, 2015,
1333 shall be enrolled in the program at the commencement of
1334 employment. If, within 90 days after commencement of employment,
1335 the employee elects membership in the Florida Retirement System,
1336 such membership is shall be effective retroactive to the date of
1337 commencement of employment as provided in s. 121.4501(4).
1338 2. An employee whose optional retirement program
1339 eligibility results from initial employment on or after July 1,
1340 2015, shall be enrolled in the program at the commencement of
1341 employment. If, within 90 days after commencement of employment,
1342 the employee elects membership in the Florida Retirement System,
1343 such membership is effective retroactive to the date of
1344 commencing employment as provided in s. 121.602(3).
1345 3.2. An Any employee whose optional retirement program
1346 eligibility results from a change in status due to the
1347 subsequent designation of the employee’s position as one of
1348 those specified in paragraph (2)(a) or due to the employee’s
1349 appointment, promotion, transfer, or reclassification to a
1350 position specified in paragraph (2)(a) shall be enrolled in the
1351 optional retirement program upon such change in status and shall
1352 be notified by the employer of such action. If, within 90 days
1353 after the date of such notification, the employee elects to
1354 retain membership in the Florida Retirement System, such
1355 continuation of membership is shall be retroactive to the date
1356 of the change in status.
1357 4.3. Notwithstanding subparagraphs 1., 2., and 3. the
1358 provisions of this paragraph, effective July 1, 1997, an any
1359 employee who is eligible to participate in the Optional
1360 Retirement Program and who fails to execute a contract with one
1361 of the approved companies and to notify the department in
1362 writing as provided in subsection (4) within 90 days after the
1363 date of eligibility shall be deemed to have elected membership
1364 in the Florida Retirement System, except as provided in s.
1365 121.051(1)(a). This provision shall also applies apply to an any
1366 employee who terminates employment in an eligible position
1367 before executing the required investment annuity contract and
1368 notifying the department. Such membership is shall be
1369 retroactive to the date of eligibility, and all appropriate
1370 contributions shall be transferred to the Florida Retirement
1371 System Trust Fund and the Health Insurance Subsidy Trust Fund.
1372 Section 14. Subsection (4), paragraph (a) of subsection
1373 (5), paragraphs (c), (g), and (h) of subsection (10), and
1374 paragraph (a) of subsection (15) of section 121.4501, Florida
1375 Statutes, are amended to read:
1376 121.4501 Florida Retirement System Investment Plan.—
1377 (4) PARTICIPATION; ENROLLMENT.—
1378 (a)1. Effective June 1, 2002, through February 28, 2003, a
1379 90-day election period was provided to each eligible employee
1380 participating in the Florida Retirement System, preceded by a
1381 90-day education period, allowing each eligible employee to
1382 elect membership in the investment plan; an employee who failed
1383 to elect the investment plan during the election period remained
1384 in the pension plan. An eligible employee who was employed in a
1385 regularly established position during the election period was
1386 granted the option to make one subsequent election, as provided
1387 in paragraph (e). With respect to an eligible employee who did
1388 not participate in the initial election period or who is
1389 employed initially in a regularly established position after the
1390 close of the initial election period but before July 1, 2015, on
1391 June 1, 2002, by a state employer:
1392 a. Any such employee may elect to participate in the
1393 investment plan in lieu of retaining his or her membership in
1394 the pension plan. The election must be made in writing or by
1395 electronic means and must be filed with the third-party
1396 administrator by August 31, 2002, or, in the case of an active
1397 employee who is on a leave of absence on April 1, 2002, by the
1398 last business day of the 5th month following the month the leave
1399 of absence concludes. This election is irrevocable, except as
1400 provided in paragraph (g). Upon making such election, the
1401 employee shall be enrolled as a member of the investment plan,
1402 the employee’s membership in the Florida Retirement System is
1403 governed by the provisions of this part, and the employee’s
1404 membership in the pension plan terminates. The employee’s
1405 enrollment in the investment plan is effective the first day of
1406 the month for which a full month’s employer contribution is made
1407 to the investment plan.
1408 b. Any such employee who fails to elect to participate in
1409 the investment plan within the prescribed time period is deemed
1410 to have elected to retain membership in the pension plan, and
1411 the employee’s option to elect to participate in the investment
1412 plan is forfeited.
1413 2. With respect to employees who become eligible to
1414 participate in the investment plan by reason of employment in a
1415 regularly established position with a state employer commencing
1416 after April 1, 2002:
1417 a. Any such employee shall, by default, be enrolled in the
1418 pension plan at the commencement of employment, and may, by the
1419 last business day of the 5th month following the employee’s
1420 month of hire, elect to participate in the investment plan. The
1421 employee’s election must be made in writing or by electronic
1422 means and must be filed with the third-party administrator. The
1423 election to participate in the investment plan is irrevocable,
1424 except as provided in paragraph (e) (g).
1425 a.b. If the employee files such election within the
1426 prescribed time period, enrollment in the investment plan is
1427 effective on the first day of employment. The retirement
1428 contributions paid through the month of the employee plan change
1429 shall be transferred to the investment program, and, effective
1430 the first day of the next month, the employer and employee must
1431 pay the applicable contributions based on the employee
1432 membership class in the program.
1433 b.c. An employee who fails to elect to participate in the
1434 investment plan within the prescribed time period is deemed to
1435 have elected to retain membership in the pension plan, and the
1436 employee’s option to elect to participate in the investment plan
1437 is forfeited.
1438 2.3. With respect to employees who become eligible to
1439 participate in the investment plan pursuant to s.
1440 121.051(2)(c)3. or s. 121.35(3)(i), the employee may elect to
1441 participate in the investment plan in lieu of retaining his or
1442 her membership in the State Community College System Optional
1443 Retirement Program or the State University System Optional
1444 Retirement Program. The election must be made in writing or by
1445 electronic means and must be filed with the third-party
1446 administrator. This election is irrevocable, except as provided
1447 in paragraph (g). Upon making such election, the employee shall
1448 be enrolled as a member in the investment plan, the employee’s
1449 membership in the Florida Retirement System is governed by the
1450 provisions of this part, and the employee’s participation in the
1451 State Community College System Optional Retirement Program or
1452 the State University System Optional Retirement Program
1453 terminates. The employee’s enrollment in the investment plan is
1454 effective on the first day of the month for which a full month’s
1455 employer and employee contribution is made to the investment
1456 plan.
1457 4. For purposes of this paragraph, “state employer” means
1458 any agency, board, branch, commission, community college,
1459 department, institution, institution of higher education, or
1460 water management district of the state, which participates in
1461 the Florida Retirement System for the benefit of certain
1462 employees.
1463 (b)1. With respect to an eligible employee who is employed
1464 in a regularly established position on September 1, 2002, by a
1465 district school board employer:
1466 a. Any such employee may elect to participate in the
1467 investment plan in lieu of retaining his or her membership in
1468 the pension plan. The election must be made in writing or by
1469 electronic means and must be filed with the third-party
1470 administrator by November 30, or, in the case of an active
1471 employee who is on a leave of absence on July 1, 2002, by the
1472 last business day of the 5th month following the month the leave
1473 of absence concludes. This election is irrevocable, except as
1474 provided in paragraph (g). Upon making such election, the
1475 employee shall be enrolled as a member of the investment plan,
1476 the employee’s membership in the Florida Retirement System is
1477 governed by the provisions of this part, and the employee’s
1478 membership in the pension plan terminates. The employee’s
1479 enrollment in the investment plan is effective the first day of
1480 the month for which a full month’s employer contribution is made
1481 to the investment program.
1482 b. Any such employee who fails to elect to participate in
1483 the investment plan within the prescribed time period is deemed
1484 to have elected to retain membership in the pension plan, and
1485 the employee’s option to elect to participate in the investment
1486 plan is forfeited.
1487 2. With respect to employees who become eligible to
1488 participate in the investment plan by reason of employment in a
1489 regularly established position with a district school board
1490 employer commencing after July 1, 2002:
1491 a. Any such employee shall, by default, be enrolled in the
1492 pension plan at the commencement of employment, and may, by the
1493 last business day of the 5th month following the employee’s
1494 month of hire, elect to participate in the investment plan. The
1495 employee’s election must be made in writing or by electronic
1496 means and must be filed with the third-party administrator. The
1497 election to participate in the investment plan is irrevocable,
1498 except as provided in paragraph (g).
1499 b. If the employee files such election within the
1500 prescribed time period, enrollment in the investment plan is
1501 effective on the first day of employment. The employer
1502 retirement contributions paid through the month of the employee
1503 plan change shall be transferred to the investment plan, and,
1504 effective the first day of the next month, the employer shall
1505 pay the applicable contributions based on the employee
1506 membership class in the investment plan.
1507 c. Any such employee who fails to elect to participate in
1508 the investment plan within the prescribed time period is deemed
1509 to have elected to retain membership in the pension plan, and
1510 the employee’s option to elect to participate in the investment
1511 plan is forfeited.
1512 3. For purposes of this paragraph, “district school board
1513 employer” means any district school board that participates in
1514 the Florida Retirement System for the benefit of certain
1515 employees, or a charter school or charter technical career
1516 center that participates in the Florida Retirement System as
1517 provided in s. 121.051(2)(d).
1518 (c)1. With respect to an eligible employee who is employed
1519 in a regularly established position on December 1, 2002, by a
1520 local employer:
1521 a. Any such employee may elect to participate in the
1522 investment plan in lieu of retaining his or her membership in
1523 the pension plan. The election must be made in writing or by
1524 electronic means and must be filed with the third-party
1525 administrator by February 28, 2003, or, in the case of an active
1526 employee who is on a leave of absence on October 1, 2002, by the
1527 last business day of the 5th month following the month the leave
1528 of absence concludes. This election is irrevocable, except as
1529 provided in paragraph (g). Upon making such election, the
1530 employee shall be enrolled as a participant of the investment
1531 plan, the employee’s membership in the Florida Retirement System
1532 is governed by the provisions of this part, and the employee’s
1533 membership in the pension plan terminates. The employee’s
1534 enrollment in the investment plan is effective the first day of
1535 the month for which a full month’s employer contribution is made
1536 to the investment plan.
1537 b. Any such employee who fails to elect to participate in
1538 the investment plan within the prescribed time period is deemed
1539 to have elected to retain membership in the pension plan, and
1540 the employee’s option to elect to participate in the investment
1541 plan is forfeited.
1542 2. With respect to employees who become eligible to
1543 participate in the investment plan by reason of employment in a
1544 regularly established position with a local employer commencing
1545 after October 1, 2002:
1546 a. Any such employee shall, by default, be enrolled in the
1547 pension plan at the commencement of employment, and may, by the
1548 last business day of the 5th month following the employee’s
1549 month of hire, elect to participate in the investment plan. The
1550 employee’s election must be made in writing or by electronic
1551 means and must be filed with the third-party administrator. The
1552 election to participate in the investment plan is irrevocable,
1553 except as provided in paragraph (g).
1554 b. If the employee files such election within the
1555 prescribed time period, enrollment in the investment plan is
1556 effective on the first day of employment. The employer
1557 retirement contributions paid through the month of the employee
1558 plan change shall be transferred to the investment plan, and,
1559 effective the first day of the next month, the employer shall
1560 pay the applicable contributions based on the employee
1561 membership class in the investment plan.
1562 c. Any such employee who fails to elect to participate in
1563 the investment plan within the prescribed time period is deemed
1564 to have elected to retain membership in the pension plan, and
1565 the employee’s option to elect to participate in the investment
1566 plan is forfeited.
1567 3. For purposes of this paragraph, “local employer” means
1568 any employer not included in paragraph (a) or paragraph (b).
1569 (b)(d) Contributions available for self-direction by a
1570 member who has not selected one or more specific investment
1571 products shall be allocated as prescribed by the state board.
1572 The third-party administrator shall notify the member at least
1573 quarterly that the member should take an affirmative action to
1574 make an asset allocation among the investment products.
1575 (c)(e) On or after July 1, 2011, a member of the pension
1576 plan who obtains a refund of employee contributions retains his
1577 or her prior plan choice upon return to employment in a
1578 regularly established position with a participating employer.
1579 (d)(f) A member of the investment plan who takes a
1580 distribution of any contributions from his or her investment
1581 plan account is considered a retiree. A retiree who is initially
1582 reemployed in a regularly established position on or after July
1583 1, 2010, is not eligible to be enrolled in renewed membership.
1584 (e)(g) After the period during which an eligible employee,
1585 who initially enrolled before July 1, 2015, had the choice to
1586 elect the pension plan or the investment plan, or the month
1587 following the receipt of the eligible employee’s plan election,
1588 if sooner, the employee shall have one opportunity, at the
1589 employee’s discretion, to choose to move from the pension plan
1590 to the investment plan or from the investment plan to the
1591 pension plan. Eligible employees may elect to move between plans
1592 only if they are earning service credit in an employer-employee
1593 relationship consistent with s. 121.021(17)(b), excluding leaves
1594 of absence without pay. Effective July 1, 2005, such elections
1595 are effective on the first day of the month following the
1596 receipt of the election by the third-party administrator and are
1597 not subject to the requirements regarding an employer-employee
1598 relationship or receipt of contributions for the eligible
1599 employee in the effective month, except when the election is
1600 received by the third-party administrator. This paragraph is
1601 contingent upon approval by the Internal Revenue Service.
1602 1. If the employee chooses to move to the investment plan,
1603 the provisions of subsection (3) govern the transfer.
1604 2. If the employee chooses to move to the pension plan, the
1605 employee must transfer from his or her investment plan account,
1606 and from other employee moneys as necessary, a sum representing
1607 the present value of that employee’s accumulated benefit
1608 obligation immediately following the time of such movement,
1609 determined assuming that attained service equals the sum of
1610 service in the pension plan and service in the investment plan.
1611 Benefit commencement occurs on the first date the employee is
1612 eligible for unreduced benefits, using the discount rate and
1613 other relevant actuarial assumptions that were used to value the
1614 pension plan liabilities in the most recent actuarial valuation.
1615 For an any employee who, at the time of the second election,
1616 already maintains an accrued benefit amount in the pension plan,
1617 the then-present value of the accrued benefit is deemed part of
1618 the required transfer amount. The division must ensure that the
1619 transfer sum is prepared using a formula and methodology
1620 certified by an enrolled actuary. A refund of any employee
1621 contributions or additional member payments made which exceed
1622 the employee contributions that would have accrued had the
1623 member remained in the pension plan and not transferred to the
1624 investment plan is not permitted.
1625 3. Notwithstanding subparagraph 2., an employee who chooses
1626 to move to the pension plan and who became eligible to
1627 participate in the investment plan by reason of employment in a
1628 regularly established position with a state employer after June
1629 1, 2002; a district school board employer after September 1,
1630 2002; or a local employer after December 1, 2002, must transfer
1631 from his or her investment plan account, and from other employee
1632 moneys as necessary, a sum representing the employee’s actuarial
1633 accrued liability. A refund of any employee contributions or
1634 additional member participant payments made which exceed the
1635 employee contributions that would have accrued had the member
1636 remained in the pension plan and not transferred to the
1637 investment plan is not permitted.
1638 4. An employee’s ability to transfer from the pension plan
1639 to the investment plan pursuant to paragraph (a) and this
1640 paragraph paragraphs (a)-(d), and the ability of a current
1641 employee to have an option to later transfer back into the
1642 pension plan under subparagraph 2., shall be deemed a
1643 significant system amendment. Pursuant to s. 121.031(4), any
1644 resulting unfunded liability arising from actual original
1645 transfers from the pension plan to the investment plan must be
1646 amortized within 30 plan years as a separate unfunded actuarial
1647 base independent of the reserve stabilization mechanism defined
1648 in s. 121.031(3)(f). For the first 25 years, a direct
1649 amortization payment may not be calculated for this base. During
1650 this 25-year period, the separate base shall be used to offset
1651 the impact of employees exercising their second program election
1652 under this paragraph. The actuarial funded status of the pension
1653 plan is will not be affected by such second program elections in
1654 any significant manner, after due recognition of the separate
1655 unfunded actuarial base. Following the initial 25-year period,
1656 any remaining balance of the original separate base shall be
1657 amortized over the remaining 5 years of the required 30-year
1658 amortization period.
1659 5. If the employee chooses to transfer from the investment
1660 plan to the pension plan and retains an excess account balance
1661 in the investment plan after satisfying the buy-in requirements
1662 under this paragraph, the excess may not be distributed until
1663 the member retires from the pension plan. The excess account
1664 balance may be rolled over to the pension plan and used to
1665 purchase service credit or upgrade creditable service in the
1666 pension plan.
1667 (f) An employee initially enrolled before July 1, 2015,
1668 shall have one opportunity in his or her working career, at the
1669 employee’s discretion, to transfer from the pension plan to the
1670 cash balance plan or from the investment plan to the cash
1671 balance plan as provided in s. 121.602(2). An eligible employee
1672 may elect to transfer between plans only if he or she is earning
1673 service credit in an employer-employee relationship consistent
1674 with s. 121.021(17)(b), excluding leaves of absence without pay.
1675 Such elections are effective on the first day of the month
1676 following the receipt of the election by the third-party
1677 administrator and are not subject to the requirements regarding
1678 an employer-employee relationship or receipt of contributions
1679 for the eligible employee in the effective month, except when
1680 the election is received by the administrator. This one-time
1681 career transfer is irrevocable, and no other transfer is
1682 allowed. If the employee chooses to transfer from the investment
1683 plan or from the pension plan to the cash balance plan, s.
1684 121.602(2) governs the transfer.
1685 (g) An employee initially enrolled on or after July 1,
1686 2015, is not eligible to enroll in the pension plan.
1687 (5) CONTRIBUTIONS.—
1688 (a) The employee and employer shall make the required
1689 contributions to the investment plan based on a percentage of
1690 the employee’s gross monthly compensation, as provided in part
1691 IV III of this chapter.
1692 (10) EDUCATION COMPONENT.—
1693 (c) The state board, in coordination with the department,
1694 shall provide for an initial and ongoing transfer education
1695 component to provide system members with information necessary
1696 to make informed plan choice decisions. The transfer education
1697 component must include, but is not limited to, information on:
1698 1. The amount of money available to a member for
1699 transferring to the investment plan or the cash balance plan to
1700 transfer to the defined contribution program.
1701 2. The features of and differences between the pension
1702 plan, the investment plan, and the cash balance plan and the
1703 defined contribution program, both generally and specifically,
1704 as those differences may affect the member.
1705 3. The expected benefit available if the member were to
1706 retire under each of the retirement plans programs, based on
1707 appropriate alternative sets of assumptions.
1708 4. The rate of return from investments in the investment
1709 plan defined contribution program and the period of time over
1710 which such rate of return must be achieved to equal or exceed
1711 the expected monthly benefit payable to the member under the
1712 pension plan or the benefit payable to the member under the cash
1713 balance plan.
1714 5. The historical rates of return for the investment
1715 alternatives available in the investment plan defined
1716 contribution programs.
1717 6. The benefits and historical rates of return on
1718 investments available in a typical deferred compensation plan or
1719 a typical plan under s. 403(b) of the Internal Revenue Code for
1720 which the employee may be eligible.
1721 7. The program choices available to employees of the State
1722 University System and the comparative benefits of each available
1723 program, if applicable.
1724 8. Payout options available in each of the retirement plans
1725 programs.
1726 (g) Funding for education of new employees may reflect
1727 administrative costs to the investment plan and the cash balance
1728 pension plan.
1729 (h) Pursuant to subsection (8), all Florida Retirement
1730 System employers have an obligation to regularly communicate the
1731 existence of the two Florida Retirement System plans and the
1732 plan choice in the natural course of administering their
1733 personnel functions, using the educational materials supplied by
1734 the state board and the Department of Management Services.
1735 (15) STATEMENT OF FIDUCIARY STANDARDS AND
1736 RESPONSIBILITIES.—
1737 (a) Investment of defined contribution plan assets shall be
1738 made for the sole interest and exclusive purpose of providing
1739 benefits to members and beneficiaries and defraying reasonable
1740 expenses of administering the plan. The plan’s program’s assets
1741 shall be invested on behalf of the program members with the
1742 care, skill, and diligence that a prudent person acting in a
1743 like manner would undertake. The performance of the investment
1744 duties set forth in this paragraph must shall comply with the
1745 fiduciary standards set forth in the Employee Retirement Income
1746 Security Act of 1974 at 29 U.S.C. s. 1104(a)(1)(A)-(C). In case
1747 of conflict with other provisions of law authorizing
1748 investments, the investment and fiduciary standards set forth in
1749 this subsection shall prevail.
1750 Section 15. Section 121.70, Florida Statutes, is amended to
1751 read:
1752 121.70 Legislative purpose and intent.—
1753 (1) This part provides for a uniform system for funding
1754 benefits provided under the Florida Retirement System Pension
1755 Plan established under part I of this chapter, (referred to in
1756 this part as the pension plan) and under the Florida Retirement
1757 System Investment Plan established under part II of this
1758 chapter, and under the Florida Retirement System Cash Balance
1759 Plan established under part III of this chapter (referred to in
1760 this part as the investment plan). The Legislature recognizes
1761 and declares that the Florida Retirement System is a single
1762 retirement system, consisting of three two retirement plans and
1763 other nonintegrated programs. Employees and employers
1764 participating in the Florida Retirement System collectively
1765 shall make shall be responsible for making contributions to
1766 support the benefits provided under the three both plans. The
1767 employees and employers shall make contributions based upon a
1768 uniform or blended contribution rate system rates determined as
1769 a percentage of the employee’s gross monthly compensation for
1770 the employee’s class or subclass of Florida Retirement System
1771 membership, irrespective of the retirement plan in which the
1772 individual employee is enrolled. This shall be known as a
1773 uniform or blended contribution rate system.
1774 (2) In establishing a uniform contribution rate system, it
1775 is the intent of the Legislature to:
1776 (a) Provide greater stability and certainty in financial
1777 planning and budgeting for Florida Retirement System employers
1778 by eliminating the fiscal instability that would be caused by
1779 multiple dual rates coupled with employee-selected plan
1780 participation;
1781 (b) Provide greater fiscal equity and uniformity for system
1782 employers by effectively distributing the financial burden and
1783 benefit of short-term system deficits and surpluses,
1784 respectively, in proportion to total system payroll; and
1785 (c) Allow employees to make their retirement plan selection
1786 decisions free of circumstances that may cause employers to
1787 favor one plan choice over another.
1788 Section 16. Subsections (1), (3), (4), and (5) of section
1789 121.71, Florida Statutes, are amended to read:
1790 121.71 Uniform rates; process; calculations; levy.—
1791 (1) In conducting the system actuarial study required under
1792 s. 121.031, the actuary shall follow all specified requirements
1793 specified to determine, by Florida Retirement System employee
1794 membership class, the dollar contribution amounts necessary for
1795 the next fiscal year for the pension plan and the cash balance
1796 plan as determined by independent valuations of each plan. In
1797 addition, The actuary shall also determine, by Florida
1798 Retirement System membership class, based on an estimate for the
1799 next fiscal year of the gross compensation of employees
1800 participating in the investment plan, the dollar contribution
1801 amounts necessary to make the allocations required under ss.
1802 121.72 and 121.73. For each employee membership class and
1803 subclass, the actuarial study must establish a uniform rate
1804 necessary to fund the benefit obligations under the both Florida
1805 Retirement System retirement plans by dividing the sum of total
1806 dollars required by the estimated gross compensation of members
1807 in the both plans.
1808 (3) Required employee retirement contribution rates for
1809 each membership class and subclass of the Florida Retirement
1810 System for the both retirement plans are as follows:
1811
1812 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2011
1813
1814 Regular Class 3.00%
1815 Special Risk Class 3.00%
1816 Special Risk Administrative Support Class 3.00%
1817 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 3.00%
1818 Elected Officers’ Class— Justices, Judges 3.00%
1819 Elected Officers’ Class— County Elected Officers 3.00%
1820 Senior Management Service Class 3.00%
1821 DROP 0.00%
1822 (4) Required employer retirement contribution rates for
1823 each membership class and subclass of the Florida Retirement
1824 System for both retirement plans are as follows:
1825
1826 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2013
1827
1828 Regular Class 3.53%
1829 Special Risk Class 11.00%
1830 Special Risk Administrative Support Class 4.17%
1831 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 6.52%
1832 Elected Officers’ Class— Justices, Judges 10.05%
1833 Elected Officers’ Class— County Elected Officers 8.44%
1834 Senior Management Class 4.81%
1835 DROP 4.63%
1836 (5) In order to address unfunded actuarial liabilities of
1837 the system, the required employer retirement contribution rates
1838 for each membership class and subclass of the Florida Retirement
1839 System for both retirement plans are as follows:
1840
1841 Membership Class Percentage ofGrossCompensation,EffectiveJuly 1, 2013
1842
1843 Regular Class 2.19%
1844 Special Risk Class 6.83%
1845 Special Risk Administrative Support Class 30.56%
1846 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 24.85%
1847 Elected Officers’ Class— Justices, Judges 17.00%
1848 Elected Officers’ Class— County Elected Officers 23.36%
1849 Senior Management Service Class 12.27%
1850 DROP 7.01%
1851 Section 17. Section 121.721, Florida Statutes, is created
1852 to read:
1853 121.721 Credits to cash balance plan member accounts and
1854 interest on accounts; percentage amounts.—
1855 (1) The service credits established in this section shall
1856 be used to fund retirement benefits under the cash balance plan
1857 and shall be transferred monthly by the Division of Retirement
1858 from the Florida Retirement System Contributions Clearing Trust
1859 Fund to the Cash Balance Plan Trust Fund and credited to each
1860 participating member’s account based on the membership class of
1861 the member.
1862 (2) The service credits are stated as a percentage of each
1863 cash balance plan member’s gross compensation for the calendar
1864 month. A change in a contribution percentage is effective the
1865 1st day of the month for which retirement contributions may be
1866 made on or after the beginning date of the change. Credit
1867 percentages may be modified by general law.
1868 (3) Employer and member credits as provided under s.
1869 121.602(5) and (6) shall be accounted for separately.
1870 (4) Credit allocations from the Florida Retirement System
1871 Contributions Clearing Account Trust Fund to the cash balance
1872 plan member annuity savings account for each member of the cash
1873 balance plan are as follows:
1874
1875 Membership Class Percentageof GrossCompensation,EffectiveJuly 1, 2015
1876
1877 Regular Class 3.00%
1878 Special Risk Class 3.00%
1879 Special Risk Administrative Support Class 3.00%
1880 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 3.00%
1881 Elected Officers’ Class— Justices, Judges 3.00%
1882 Elected Officers’ Class— County Elected Officers 3.00%
1883 Senior Management Service Class 3.00%
1884 (5) Service credit allocations from the Florida Retirement
1885 System Contributions Clearing Account Trust Fund to the cash
1886 balance plan employer retirement annuity account for each member
1887 of the cash balance plan are as follows:
1888 Membership Class Percentageof GrossCompensation,EffectiveJuly 1, 2015
1889
1890 Regular Class 3.05%
1891 Special Risk Class 9.30%
1892 Special Risk Administrative Support Class 3.05%
1893 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 5.58%
1894 Elected Officers’ Class— Justices, Judges 9.11%
1895 Elected Officers’ Class— County Elected Officers 7.55%
1896 Senior Management Service Class 4.28%
1897 (6)(a) Beginning July 1, 2015, each member of the cash
1898 balance plan may be credited with interest credits on the
1899 balance of the member’s accounts.
1900 (b) Effective July 1, 2015, the guaranteed interest credits
1901 payable on the balance of each member’s retirement annuity
1902 account and annuity savings account accrues at an effective
1903 annual rate of 2 percent, compounded monthly and credited
1904 monthly based on the prior month’s accumulated ending balances.
1905 Such interest credits must be posted to member accounts by the
1906 15th business day of the following month.
1907 (c) Effective July 1, 2015, additional interest credits
1908 shall be credited as follows:
1909 1. If the annual rate of return on investments of the cash
1910 balance plan assets for the prior plan year did not exceed 2
1911 percent, no additional interest credits shall be allowed.
1912 2. If the annual rate of return on investments of the cash
1913 balance plan assets for the prior plan year was greater than 2
1914 percent, additional interest credits are payable on each
1915 member’s retirement annuity account and annuity savings account
1916 equal to 75 percent of the difference between the annual rate of
1917 return and 2 percent.
1918 3. All additional interest credits payable under this
1919 paragraph shall be allocated on the 15th business day of
1920 November following the close of the plan year based on the
1921 member’s account balances as of the preceding June 30.
1922 (d) To be eligible for an interest credit, the member must
1923 have an account balance at the time the interest credit is
1924 posted to the account. Interest credits may not be awarded to a
1925 member who has taken a full distribution of the member’s
1926 accounts or who has annuitized the member’s accumulated total
1927 account balance before interest credits are posted.
1928 (e) Notwithstanding paragraphs (b) and (c), interest
1929 credits may not be granted on the member’s nonvested account
1930 balances following the end of the second plan year after the
1931 member has terminated without meeting the vesting requirements
1932 of the cash balance plan.
1933 Section 18. Section 121.73, Florida Statutes, is amended to
1934 read:
1935 121.73 Allocations for member disability coverage and
1936 coverage for members killed in the line of duty; percentage
1937 amounts.—
1938 (1) The allocations established in:
1939 (a) Subsection (3) shall be used to provide disability
1940 coverage for members in the investment plan and shall be
1941 transferred monthly by the Division of Retirement from the
1942 Florida Retirement System Contributions Clearing Trust Fund to
1943 the disability account of the Florida Retirement System Trust
1944 Fund.
1945 (b) Subsection (4) shall be used to provide disability
1946 coverage for members in the cash balance plan and transferred
1947 monthly by the Division of Retirement from the Florida
1948 Retirement System Contributions Clearing Trust Fund to the
1949 disability account of the Florida Retirement System Cash Balance
1950 Plan Trust Fund.
1951 (2) The allocations contained in this section are stated as
1952 a percentage of each investment plan or cash balance plan
1953 member’s gross compensation for the calendar month. A change in
1954 a contribution percentage is effective the 1st first day of the
1955 month for which retirement contributions may be made on or after
1956 the beginning date of the change. Contribution percentages may
1957 be modified by general law.
1958 (3) Effective July 1, 2002, allocations from the Florida
1959 Retirement System Contributions Clearing Trust Fund to provide
1960 disability coverage for members in the investment plan, and to
1961 offset the costs of administering such said coverage, are as
1962 follows:
1963
1964 Membership Class Percentage of Gross Compensation
1965
1966 Regular Class 0.25%
1967 Special Risk Class 1.33%
1968 Special Risk Administrative Support Class 0.45%
1969 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.41%
1970 Elected Officers’ Class— Justices, Judges 0.73%
1971 Elected Officers’ Class— County Elected Officers 0.41%
1972 Senior Management Service Class 0.26%
1973 (4) Allocations from the Florida Retirement System
1974 Contributions Clearing Trust Fund to provide disability coverage
1975 for members in the cash balance plan and to offset costs of
1976 administering such coverage, are as follows:
1977
1978 Membership Class Percentage of GrossCompensationEffective July 1, 2015
1979
1980 Regular Class 0.26%
1981 Special Risk Class 0.95%
1982 Special Risk Administrative Support Class 0.26%
1983 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.24%
1984 Elected Officers’ Class— Justices, Judges 0.47%
1985 Elected Officers’ Class— County Elected Officers 0.27%
1986 Senior Management Service Class 0.21%
1987 (5) The allocations established in this subsection shall be
1988 transferred monthly by the Division of Retirement from the
1989 Florida Retirement System Contributions Clearing Trust Fund to
1990 the in-line-of-duty death account of the Florida Retirement
1991 System Cash Balance Plan Trust Fund and shall be used to provide
1992 coverage for members of the cash balance plan killed in the line
1993 of duty. The allocations are as follows:
1994
1995 Membership Class Percentage of GrossCompensationEffective July 1, 2015
1996
1997 Regular Class 0.09%
1998 Special Risk Class 0.25%
1999 Special Risk Administrative Support Class 0.09%
2000 Elected Officers’ Class— Legislators, Governor, Lt. Governor, Cabinet Officers, State Attorneys, Public Defenders 0.14%
2001 Elected Officers’ Class— Justices, Judges 0.18%
2002 Elected Officers’ Class— County Elected Officers 0.16%
2003 Senior Management Service Class 0.11%
2004
2005 Section 19. Section 121.74, Florida Statutes, is amended to
2006 read:
2007 121.74 Administrative and educational expenses.—In addition
2008 to contributions required to fund member accounts under ss.
2009 121.71 and 121.73, effective July 1, 2010, through June 30,
2010 2014, employers participating in the Florida Retirement System
2011 shall contribute an employer assessment amount equal to 0.03
2012 percent of the payroll reported for each class or subclass of
2013 Florida Retirement System membership. Effective July 1, 2014,
2014 the employer assessment is the contribution rate shall be 0.04
2015 percent of the payroll reported for each class or subclass of
2016 membership. The amount assessed contributed shall be transferred
2017 by the Division of Retirement from the Florida Retirement System
2018 Contributions Clearing Trust Fund to the State Board of
2019 Administration’s Administrative Trust Fund to offset the costs
2020 of administering the investment plan and the cash balance plan
2021 and the costs of providing educational services to members of
2022 the Florida Retirement System. Approval of the trustees is
2023 required before the expenditure of these funds. Payments for
2024 third-party administrative or educational expenses shall be made
2025 only pursuant to the terms of the approved contracts for such
2026 services.
2027 Section 20. Section 121.76, Florida Statutes, is amended to
2028 read:
2029 121.76 Contributions for social security and for retiree
2030 health insurance subsidy.—Contributions required under this part
2031 shall be made or deducted, as may be appropriate, for each pay
2032 period and are in addition to employer and member contributions
2033 required for social security and the Retiree Health Insurance
2034 Subsidy Trust Fund as provided under parts I and II of this
2035 chapter.
2036 Section 21. Subsection (3) of section 121.78, Florida
2037 Statutes, is amended to read:
2038 121.78 Payment and distribution of contributions.—
2039 (3)(a) Employee and employer contributions and accompanying
2040 payroll data received after the 5th working day of the month are
2041 considered late. The division employer shall assess the employer
2042 be assessed by the division of Retirement a penalty of 1 percent
2043 of the contributions due for each calendar month or part thereof
2044 that the contributions or accompanying payroll data are late.
2045 Proceeds from the 1 percent assessment against contributions
2046 made on behalf of members of the pension plan shall must be
2047 deposited in the Florida Retirement System Trust Fund, and
2048 proceeds from the 1 percent assessment against contributions
2049 made on behalf of members of the investment plan shall be
2050 transferred to the third-party administrator for deposit into
2051 member accounts, as provided in paragraph (c). Proceeds from the
2052 assessment made on behalf of members of the cash balance plan
2053 shall be credited to the Florida Retirement System Cash Balance
2054 Plan Trust Fund.
2055 (b) Retirement contributions paid for a prior period shall
2056 be charged a delinquent fee of 1 percent for each calendar month
2057 or part thereof that the contributions should have been paid.
2058 This includes prior period contributions due to incorrect wages
2059 and contributions from an earlier report or wages and
2060 contributions that should have been reported but were not. The
2061 delinquent assessments may not be waived. Proceeds from the
2062 delinquent fee made on behalf of members of the pension plan
2063 shall be deposited into the Florida Retirement System Trust
2064 Fund. Proceeds from the delinquent fee made on behalf of members
2065 of the investment plan shall be transferred to the third-party
2066 administrator for deposit into member accounts. Proceeds from
2067 the delinquent fee made on behalf of members of the cash balance
2068 plan shall be deposited into the Florida Retirement System Cash
2069 Balance Plan Trust Fund to be credited to the annuity savings
2070 account and retirement savings accounts of the members.
2071 (c) If employee contributions or contributions made by an
2072 employer on behalf of members of the investment plan or
2073 accompanying payroll data are not received within the calendar
2074 month they are due, including, but not limited to, contribution
2075 adjustments as a result of employer errors or corrections, and
2076 if that delinquency results in market losses to members, the
2077 employer shall reimburse each member’s account for market losses
2078 resulting from the late contributions. If a member has
2079 terminated employment and taken a distribution, the member is
2080 responsible for returning any excess contributions erroneously
2081 provided by employers, adjusted for any investment gain or loss
2082 incurred during the period such excess contributions were in the
2083 member’s account. The state board or its designated agent shall
2084 communicate to terminated members any obligation to repay such
2085 excess contribution amounts. However, the state board, its
2086 designated agents, the Florida Retirement System Investment Plan
2087 Trust Fund, the department, or the Florida Retirement System
2088 Trust Fund may not incur any loss or gain as a result of an
2089 employer’s correction of such excess contributions. The third
2090 party administrator, hired by the state board pursuant to s.
2091 121.4501(8), shall calculate the market losses for each affected
2092 member. If contributions made on behalf of members of the
2093 investment plan or accompanying payroll data are not received
2094 within the calendar month due, the employer shall also pay the
2095 cost of the third-party administrator’s calculation and
2096 reconciliation adjustments resulting from the late
2097 contributions. The third-party administrator shall notify the
2098 employer of the results of the calculations and the total amount
2099 due from the employer for such losses and the costs of
2100 calculation and reconciliation. The employer shall remit to the
2101 division of Retirement the amount due within 30 working days
2102 after the date of the penalty notice sent by the division. The
2103 division shall transfer that amount to the third-party
2104 administrator, which shall deposit proceeds from the 1 percent
2105 assessment and from individual market losses into member
2106 accounts, as appropriate. The state board may adopt rules to
2107 administer the provisions regarding late contributions, late
2108 submission of payroll data, the process for reimbursing member
2109 accounts for resultant market losses, and the penalties charged
2110 to the employers.
2111 (d) If a cash balance plan member has terminated employment
2112 and taken a benefit payment, the member is responsible for
2113 returning any excess contributions erroneously provided by
2114 employers. The state board or its designated agent shall
2115 communicate to terminated members their obligation to repay
2116 excess contribution amounts. However, the state board, its
2117 designated agents, the Florida Retirement System Cash Balance
2118 Plan Trust Fund, or the department may not incur any loss as a
2119 result of an employer’s correction of the excess contributions.
2120 (e)(d) If employee contributions reported by an employer on
2121 behalf of members are reduced as a result of employer errors or
2122 corrections, and the member has terminated employment and taken
2123 a refund, or distribution, or benefit payment, the employer
2124 shall be billed and is responsible for recovering from the
2125 member any excess contributions erroneously provided by the
2126 employer.
2127 (f)(e) Assessments Delinquency fees specified in paragraph
2128 (a) may be waived by the division, with regard to pension plan
2129 contributions, and by the state board, with regard to investment
2130 plan or cash balance plan contributions, only if, in the opinion
2131 of the division or the board, as appropriate, exceptional
2132 circumstances beyond the employer’s control prevented remittance
2133 by the prescribed due date notwithstanding the employer’s good
2134 faith efforts to effect delivery. Such a waiver of delinquency
2135 may be granted an employer only once each plan year.
2136 (g)(f) If the employer submits excess employer or employee
2137 contributions, the employer shall receive a credit to be applied
2138 against future contributions owed. The employer is responsible
2139 for reimbursing the member for any excess contributions
2140 submitted if a any return of such an erroneous excess pretax
2141 contribution by the program is made within 1 year after making
2142 erroneous contributions or such other period allowed under
2143 applicable Internal Revenue guidance.
2144 (h)(g) If contributions made by an employer on behalf of
2145 members in the investment plan are delayed in posting to member
2146 accounts due to acts of God beyond the control of the division
2147 of Retirement, the state board, or the third-party
2148 administrator, as applicable, market losses resulting from the
2149 late contributions are not payable to the members.
2150 Section 22. Subsection (10) of section 216.136, Florida
2151 Statutes, is amended to read:
2152 216.136 Consensus estimating conferences; duties and
2153 principals.—
2154 (10) FLORIDA RETIREMENT SYSTEM ACTUARIAL ASSUMPTION
2155 CONFERENCE.—The Florida Retirement System Actuarial Assumption
2156 Conference shall develop official information with respect to
2157 the economic and noneconomic assumptions and funding methods of
2158 the Florida Retirement System necessary to perform the system
2159 actuarial studies study undertaken pursuant to ss. s. 121.031(3)
2160 and 121.602(20). Such information must shall include: an
2161 analysis of the actuarial assumptions and actuarial methods used
2162 in the studies study and a determination of whether changes to
2163 the assumptions or methods need to be made due to experience
2164 changes or revised future forecasts.
2165 Section 23. Section 238.072, Florida Statutes, is amended
2166 to read:
2167 238.072 Special service provisions for extension
2168 personnel.—All state and county cooperative extension personnel
2169 holding appointments by the United States Department of
2170 Agriculture for extension work in agriculture and home economics
2171 in this state who are joint representatives of the University of
2172 Florida and the United States Department of Agriculture, as
2173 provided in s. 121.051(8) s. 121.051(7), who are members of the
2174 Teachers’ Retirement System, chapter 238, and who are prohibited
2175 from transferring to and participating in the Florida Retirement
2176 System, chapter 121, may retire with full benefits upon
2177 completion of 30 years of creditable service and shall be
2178 considered to have attained normal retirement age under this
2179 chapter, any law to the contrary notwithstanding. In order to
2180 comply with the provisions of s. 14, Art. X of the State
2181 Constitution, any liability accruing to the Florida Retirement
2182 System Trust Fund as a result of the provisions of this section
2183 shall be paid on an annual basis from the General Revenue Fund.
2184 Section 24. Subsection (11) of section 413.051, Florida
2185 Statutes, is amended to read:
2186 413.051 Eligible blind persons; operation of vending
2187 stands.—
2188 (11) Effective July 1, 1996, blind licensees who remain
2189 members of the Florida Retirement System pursuant to s.
2190 121.051(7)(b)1. must s. 121.051(6)(b)1. shall pay any
2191 unappropriated retirement costs from their net profits or from
2192 program income. Within 30 days after the effective date of this
2193 act, Each blind licensee who is eligible to maintain membership
2194 in the Florida Retirement System under s. 121.051(7)(b)1. s.
2195 121.051(6)(b)1., but who elects to withdraw from the system as
2196 provided in s. 121.051(7)(b)3. s. 121.051(6)(b)3., must, on or
2197 before July 31, 1996, notify the Division of Blind Services and
2198 the Department of Management Services in writing of his or her
2199 election to withdraw. Failure to timely notify the divisions
2200 shall be deemed a decision to remain a compulsory member of the
2201 Florida Retirement System. However, if, at any time after July
2202 1, 1996, sufficient funds are not paid by a blind licensee to
2203 cover the required contribution to the Florida Retirement
2204 System, that blind licensee shall become ineligible to
2205 participate in the Florida Retirement System on the last day of
2206 the first month for which no contribution is made or the amount
2207 contributed is insufficient to cover the required contribution.
2208 For any blind licensee who becomes ineligible to participate in
2209 the Florida Retirement System as described in this subsection,
2210 no creditable service shall be earned under the Florida
2211 Retirement System for any period following the month that
2212 retirement contributions ceased to be reported. However, any
2213 such person may participate in the Florida Retirement System in
2214 the future if employed by a participating employer in a covered
2215 position.
2216 Section 25. The Legislature finds that a proper and
2217 legitimate state purpose is served when employees and retirees
2218 of the state and its political subdivisions, and the dependents,
2219 survivors, and beneficiaries of such employees and retirees, are
2220 extended the basic protections afforded by governmental
2221 retirement systems. These persons must be provided benefits that
2222 are fair and adequate and that are managed, administered, and
2223 funded in an actuarially sound manner, as required by s. 14,
2224 Article X of the State Constitution and part VII of chapter 112,
2225 Florida Statutes. Therefore, the Legislature determines and
2226 declares that this act fulfills an important state interest.
2227 Section 26. (1) Effective July 1, 2015, in order to fund
2228 the benefit changes provided in this act, the required employer
2229 contribution rates for the unfunded actuarial liability of the
2230 Florida Retirement System established in s. 121.75(5), Florida
2231 Statutes, shall be adjusted as follows:
2232 (a) Elected Officers’ Class.—Rates for Legislators, the
2233 Governor, the Lieutenant Governor, Cabinet Officers, State
2234 Attorneys, and Public Defenders shall be increased by _.__
2235 percentage points.
2236 (b) Elected Officers’ Class.—Rates for County Elected
2237 Officers shall be increased by _.__ percentage points.
2238 (c) Senior Management Service Class.—Rates for the Senior
2239 Management Service Class shall be increased by __.__ percentage
2240 points.
2241 (2) The adjustments provided in subsection (1) are in
2242 addition to all other changes to such contribution rates which
2243 may be enacted into law to take effect on July 1, 2013, and July
2244 1, 2015. The Division of Law Revision and Information is
2245 requested to adjust accordingly the contribution rates provided
2246 in s. 121.71, Florida Statutes.
2247 Section 27. (1) The State Board of Administration shall
2248 request a determination letter as soon as practicable from the
2249 Internal Revenue Service as to whether this act or any portion
2250 of this act will cause the Florida Retirement System to be
2251 disqualified for tax purposes under the Internal Revenue Code.
2252 If the Internal Revenue Service refuses to act upon such
2253 request, a legal opinion from a qualified tax attorney or firm
2254 may be substituted for the determination letter.
2255 (2) If the board receives notification from the Internal
2256 Revenue Service that this act or any portion of this act will
2257 cause the Florida Retirement System to be disqualified, the
2258 portion that will cause the disqualification does not apply.
2259 Upon such notice, the board shall notify the presiding officers
2260 of the Legislature.
2261 Section 28. This act shall take effect July 1, 2015.
