Bill Text: FL H1319 | 2010 | Regular Session | Introduced


Bill Title: Governmental Retirement Systems

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2010-04-30 - Died in Committee on Governmental Affairs Policy (EDCA) [H1319 Detail]

Download: Florida-2010-H1319-Introduced.html
HB 1319
1
A bill to be entitled
2An act relating to governmental retirement systems;
3providing a short title; creating s. 112.049, F.S.;
4requiring certain public employees to contribute an
5additional specified percentage of their gross income to
6the primary public-sponsored retirement plan in which they
7are participating; amending s. 112.63, F.S.; providing
8requirements for certain retirement system or plan
9actuarial reports; providing requirements for certain
10system or plan experience studies; providing for the
11closing of certain plans; amending s. 112.65, F.S.;
12providing a maximum retirement benefit for certain
13retirement system or plan members hired after a specified
14date; prohibiting the factoring of overtime and certain
15other compensation into any pension benefit; amending s.
16112.66, F.S.; requiring the board of trustees of each
17retirement system or plan to provide a detailed accounting
18report of its expenses for each fiscal year to the plan
19sponsor and to the Department of Management Services;
20providing reporting requirements; requiring the board of
21trustees of each retirement system or plan to provide an
22administrative expense budget to the plan sponsor;
23amending s. 121.021, F.S.; redefining the terms
24"compensation," "average final compensation," and "normal
25retirement date" for purposes of the benefit retirement
26program or the Public Employee Optional Retirement Program
27of the Florida Retirement System; amending s. 121.0515,
28F.S.; conforming provisions to changes made by this act;
29amending s. 121.052, F.S.; conforming provisions to
30changes made by this act; amending s. 121.091, F.S.;
31providing limitations on benefits payable to certain
32members of the system; prohibiting the factoring of
33overtime and certain other compensation into any pension
34benefit; revising formula for the determination of
35credible years of service for certain members; conforming
36a cross-reference; amending s. 121.4501, F.S.; conforming
37provisions to changes made by this act; amending s.
38122.02, F.S.; redefining the term "average final
39compensation" for purposes of the State and County
40Officers and Employees' Retirement System; amending s.
41175.032, F.S.; redefining the term "average final
42compensation" for purposes of determining credit for prior
43service as a firefighter; amending s. 175.061, F.S.;
44providing that certain members of a special fire control
45district board of trustees may not be members or
46participants of the plan for which the board administers
47the trust fund; amending s. 175.091, F.S.; revising
48requirements for increasing firefighter member
49contributions; amending s. 175.162, F.S.; conforming
50provisions to changes made by this act; amending s.
51175.351, F.S.; removing a cross-reference to conform to
52changes made by the act; authorizing a municipality or
53special fire control district to establish a defined
54contribution retirement plan for certain purposes;
55requiring municipalities and special fire control
56districts with their own pension plans for firefighters to
57provide certain extra benefits; amending s. 185.02, F.S.;
58redefining the terms "average final compensation" and
59"compensation" for purposes of determining credit for
60prior service as a municipal police officer; amending s.
61185.05, F.S.; providing that certain members of a
62municipality board of trustees may not be members or
63participants of the plan for which the board administers
64the trust fund; amending s. 185.07, F.S.; revising
65requirements for increasing police officer member
66contributions; amending s. 185.16, F.S.; conforming
67provisions to changes made by this act; amending s.
68185.35, F.S.; removing a cross-reference to conform to
69changes made by the act; authorizing a municipality to
70establish a defined contribution retirement plan for
71certain purposes; requiring municipalities with their own
72pension plans for police officers to provide certain extra
73benefits; requiring state and local government balance
74sheets to contain certain pension information; creating
75ch. 214, F.S., relating to truth in accounting; creating
76s. 214.101, F.S.; providing a short title; providing
77definitions; F.S.; creating s. 214.102, F.S.; requiring
78the Chief Financial Officer and officials of governing
79bodies of a political subdivision of the state to issue
80specified reports; providing reporting requirements;
81creating s. 214.103, F.S.; providing report submission
82requirements; requiring the reports to be posted online
83and made available to the public; authorizing certain
84units of government to postpone compliance with the
85provisions of this act under specified conditions;
86providing effective dates.
87
88 WHEREAS, it is important for state and local governments to
89provide reasonable retirement benefits for their employees, who
90are their most valuable resource, and
91 WHEREAS, it is necessary for state and local governments to
92be in an adequate financial position in order to keep the
93retirement promises made and to fund retirement benefits, and
94 WHEREAS, state and local governments must increase the
95predictability of, and reduce the expense of, future pension
96obligations in order to remain financially solvent, thus
97preserving the benefits of current employees who may have
98already been promised certain retirement benefits, and
99 WHEREAS, citizens have a right to know, and governments
100have an obligation to disclose, the dollar amount of all
101retirement-related liabilities owed at any point in time, NOW,
102THEREFORE,
103
104Be It Enacted by the Legislature of the State of Florida:
105
106 Section 1. This act may be cited as the "Public Employee
107Retirement Preservation Act."
108 Section 2. Section 112.049, Florida Statutes, is created
109to read:
110 112.049 Contributions to primary public-sponsored
111retirement plans.-All public employees hired on or after July 1,
1122011, and all employees whose DROP participation begins on or
113after July 1, 2011, shall contribute an additional 1 percent of
114their gross income to the primary public-sponsored retirement
115plan in which they are participating. Such contribution shall be
116made before any benefit improvement.
117 Section 3. Subsection (1) of section 112.63, Florida
118Statutes, is amended, and subsection (7) is added to that
119section, to read:
120 112.63 Actuarial reports and statements of actuarial
121impact; review.-
122 (1) Each retirement system or plan subject to the
123provisions of this part act shall have regularly scheduled
124actuarial reports prepared and certified by an enrolled actuary.
125The actuarial report shall consist of, but shall not be limited
126to, the following:
127 (a) Adequacy of employer and employee contribution rates
128in meeting levels of employee benefits provided in the system
129and changes, if any, needed in such rates to achieve or preserve
130a level of funding deemed adequate to enable payment through the
131indefinite future of the benefit amounts prescribed by the
132system, which shall include a valuation of present assets, based
133on statement value, and prospective assets and liabilities of
134the system and the extent of unfunded accrued liabilities, if
135any.
136 (b) A plan to amortize any unfunded liability pursuant to
137s. 112.64 and a description of actions taken to reduce the
138unfunded liability.
139 (c) A description and explanation of actuarial
140assumptions.
141 (d) A schedule illustrating the amortization of unfunded
142liabilities, if any.
143 (e) A comparative review illustrating the actual salary
144increases granted and the rate of investment return realized
145over the 3-year period preceding the actuarial report with the
146assumptions used in both the preceding and current actuarial
147reports.
148 (f) A statement by the enrolled actuary that the report is
149complete and accurate and that in his or her opinion the
150techniques and assumptions used are reasonable and meet the
151requirements and intent of this part act.
152 (g) A 5-year projection of the employer's annual required
153contributions for each of the 5 fiscal years immediately after
154the date of the actuarial report, based on actual experience for
155the preceding 5-year period and the current assumptions and cost
156methods of the retirement system or plan. Plans with fewer than
15720 members are not subject to the requirements of this
158paragraph, but if the State Board of Administration determines
159that the sponsor of such an exempt plan fails to adequately plan
160for future plan expenses for 3 consecutive years, the plan shall
161be closed within 2 years after such a determination and any
162employee hired after the date of the inadequacy determination
163shall join the Florida Retirement System.
164
165The actuarial cost methods utilized for establishing the amount
166of the annual actuarial normal cost to support the promised
167benefits shall only be those methods approved in the Employee
168Retirement Income Security Act of 1974 and as permitted under
169regulations prescribed by the Secretary of the Treasury.
170 (7) Each retirement system or plan subject to the
171provisions of this part shall have an experience study prepared
172and certified by an enrolled actuary at least once every 5
173years. The study shall compare the retirement system's or plan's
174actual experience on key factors, including, but not limited to,
175investment return, payroll growth, employee salary changes,
176employee retirement rates, and employee turnover, with the
177retirement system's or plan's assumptions on each factor. If a
178retirement system's or plan's actual experience materially
179varies from any retirement system or plan's assumption, the
180enrolled actuary shall explain the material variance and provide
181a recommendation as to whether a change in the assumption is
182appropriate. Plans with fewer than 20 members are not subject to
183the requirements of this paragraph, but if the State Board of
184Administration determines that the sponsor of such an exempt
185plan fails to use realistic assumptions for 3 consecutive years,
186the plan shall be closed within 2 years after such determination
187and any employee hired after the date of the closing shall join
188the Florida Retirement System.
189 Section 4. Subsection (1) of section 112.65, Florida
190Statutes, is amended to read:
191 112.65 Limitation of benefits.-
192 (1) ESTABLISHMENT OF PROGRAM.-The normal retirement
193benefit or pension payable to a retiree who becomes a member of
194any retirement system or plan and who has not previously
195participated in such plan, on or after January 1, 1980, shall
196not exceed 100 percent of his or her average final compensation.
197The normal retirement benefit or pension payable to a member of
198any retirement system or plan who has not attained 10 years of
199credited service under such a system or plan on or before July
2001, 2010, shall not exceed 80 percent of his or her average final
201compensation. Overtime or any other compensation beyond base
202hourly or annual salary may not be factored into any pension
203benefit. However, nothing contained in this section shall apply
204to supplemental retirement benefits or to pension increases
205attributable to cost-of-living increases or adjustments. For the
206purposes of this section, benefits accruing in individual
207participant accounts established under the Public Employee
208Optional Retirement Program established in part II of chapter
209121 are considered supplemental benefits. As used in this
210section, the term "average final compensation" means the average
211of the member's earnings over a period of time which the
212governmental entity has established by statute, charter, or
213ordinance.
214 Section 5. Subsections (11) and (12) are added to section
215112.66, Florida Statutes, to read:
216 112.66 General provisions.-The following general
217provisions relating to the operation and administration of any
218retirement system or plan covered by this part shall be
219applicable:
220 (11) The board of trustees of each retirement system or
221plan shall provide a detailed accounting report of its expenses
222for each fiscal year to the plan sponsor and the Department of
223Management Services and shall make the report available to every
224member of the retirement system or plan. The report shall
225include, but is not limited to, all administrative expenses,
226defined for the purpose of this subsection and subsection (12)
227as all expenses relating to any legal counsel, actuary, plan
228administrator, or other consultant, and all travel and other
229expenses paid to or on behalf of the members of the board of
230trustees or any other person on behalf of the retirement system
231or plan.
232 (12) The board of trustees of each retirement system or
233plan shall submit its proposed administrative expense budget for
234each fiscal year at least 120 days before the fiscal year to the
235plan sponsor for the sponsor's review and approval. The plan
236sponsor may amend any part of the budget prior to approval. The
237budget shall regulate administrative expenses of the board of
238trustees. The board of trustees may not amend the budget without
239the prior approval of the amendment by the plan sponsor.
240 Section 6. Paragraph (a) of subsection (22) and
241subsections (24) and (29) of section 121.021, Florida Statutes,
242are amended to read:
243 121.021 Definitions.-The following words and phrases as
244used in this chapter have the respective meanings set forth
245unless a different meaning is plainly required by the context:
246 (22) "Compensation" means the monthly salary paid a member
247by his or her employer for work performed arising from that
248employment.
249 (a) Compensation shall include:
250 1. Overtime payments paid from a salary fund.
251 2. Accumulated annual leave payments.
252 3. Payments in addition to the employee's base rate of pay
253if all the following apply:
254 a. The payments are paid according to a formal written
255policy that applies to all eligible employees equally;
256 b. The policy provides that payments shall commence no
257later than the 11th year of employment;
258 c. The payments are paid for as long as the employee
259continues his or her employment; and
260 d. The payments are paid at least annually.
261 4. amounts withheld for tax sheltered annuities or
262deferred compensation programs, or any other type of salary
263reduction plan authorized under the Internal Revenue Code.
264 5. Payments made in lieu of a permanent increase in the
265base rate of pay, whether made annually or in 12 or 26 equal
266payments within a 12-month period, when the member's base pay is
267at the maximum of his or her pay range. When a portion of a
268member's annual increase raises his or her pay range and the
269excess is paid as a lump sum payment, such lump sum payment
270shall be compensation for retirement purposes.
271 (24) "Average final compensation" means the average of the
2725 highest fiscal years of compensation for creditable service
273prior to retirement, termination, or death. For in-line-of-duty
274disability benefits, if less than 5 years of creditable service
275have been completed, the term "average final compensation" means
276the average annual compensation of the total number of years of
277creditable service prior to retirement, termination, or death.
278Each year used in the calculation of average final compensation
279shall commence on July 1. If there are no records to show the
280total number of years of creditable service performed by an
281employee, "average final compensation" means the average annual
282compensation for the total number of years of creditable service
283for which records exist prior to retirement, termination, or
284death.
285 (a) The average final compensation shall include:
286 1. Accumulated annual leave payments, not to exceed 500
287hours; and
288 2. all payments defined as compensation in subsection
289(22).
290 (b) The average final compensation shall not include:
291 1. Compensation paid to professional persons for special
292or particular services;
293 2. Payments for accumulated sick leave made due to
294retirement or termination;
295 3. Payments for accumulated annual leave in excess of 500
296hours;
297 4. Bonuses as defined in subsection (47);
298 5. Third party payments made on and after July 1, 1990; or
299 6. Fringe benefits (for example, automobile allowances or
300housing allowances).; or
301 7. Overtime compensation.
302 (29) "Normal retirement date" means:
303 (a) For persons employed before July 1, 2011, the date a
304member attains normal retirement age and is vested, which is
305determined as follows:
306 1.(a) If a Regular Class member, a Senior Management
307Service Class member, or an Elected Officers' Class member:
308 a.1. The first day of the month the member completes 6 or
309more years of creditable service and attains age 62; or
310 b.2. The first day of the month following the date the
311member completes 30 years of creditable service, regardless of
312age.
313 2.(b) If a Special Risk Class member:
314 a.1. The first day of the month the member completes 6 or
315more years of creditable service in the Special Risk Class and
316attains age 55;
317 b.2. The first day of the month following the date the
318member completes 25 years of creditable service in the Special
319Risk Class, regardless of age; or
320 c.3. The first day of the month following the date the
321member completes 25 years of creditable service and attains age
32252, which service may include a maximum of 4 years of military
323service credit as long as such credit is not claimed under any
324other system and the remaining years are in the Special Risk
325Class.
326 (b) For persons employed on or after July 1, 2011, the
327date a member attains normal retirement age and is vested, which
328is determined as follows:
329 1. If a Regular Class member, a Senior Management Service
330Class member, or an Elected Officers' Class member:
331 a. The first day of the month the member completes 6 or
332more years of creditable service and attains age 65; or
333 b. The first day of the month following the date the
334member completes 33 years of creditable service, regardless of
335age.
336 2. If a Special Risk Class member:
337 a. The first day of the month the member completes 6 or
338more years of creditable service in the Special Risk Class and
339attains age 60;
340 b. The first day of the month following the date the
341member completes 33 years of creditable service in the Special
342Risk Class, regardless of age; or
343 c. The first day of the month following the date the
344member completes 25 years of creditable service and attains age
34560, which service may include a maximum of 4 years of military
346service credit as long as such credit is not claimed under any
347other system and the remaining years are in the Special Risk
348Class.
349
350"Normal retirement age" is attained on the "normal retirement
351date."
352 Section 7. Paragraph (a) of subsection (7) of section
353121.0515, Florida Statutes, is amended to read:
354 121.0515 Special risk membership.-
355 (7) RETENTION OF SPECIAL RISK NORMAL RETIREMENT DATE.-
356 (a) A special risk member who is moved or reassigned to a
357nonspecial risk law enforcement, firefighting, correctional, or
358emergency medical care administrative support position with the
359same agency, or who is subsequently employed in such a position
360with any law enforcement, firefighting, correctional, or
361emergency medical care agency under the Florida Retirement
362System, shall participate in the Special Risk Administrative
363Support Class and shall earn credit for such service at the same
364percentage rate as that earned by a regular member.
365Notwithstanding the provisions of subsection (4), service in
366such an administrative support position shall, for purposes of
367s. 121.091, apply toward satisfaction of the special risk normal
368retirement date, as defined in s. 121.021(29)(b), provided that,
369while in such position, the member remains certified as a law
370enforcement officer, firefighter, correctional officer,
371emergency medical technician, or paramedic; remains subject to
372reassignment at any time to a position qualifying for special
373risk membership; and completes an aggregate of 6 or more years
374of service as a designated special risk member prior to
375retirement.
376 Section 8. Effective July 1, 2011, subsection (1) of
377section 121.0515, Florida Statutes, is amended to read:
378 121.0515 Special risk membership.-
379 (1) LEGISLATIVE INTENT.-In creating the Special Risk Class
380of membership within the Florida Retirement System, it is the
381intent and purpose of the Legislature to recognize that persons
382employed in certain categories of law enforcement, firefighting,
383criminal detention, and emergency medical care positions are
384required as one of the essential functions of their positions to
385perform work that is physically demanding or arduous, or work
386that requires extraordinary agility and mental acuity, and that
387such persons, because of diminishing physical and mental
388faculties, may find that they are not able, without risk to the
389health and safety of themselves, the public, or their coworkers,
390to continue performing such duties and thus enjoy the full
391career and retirement benefits enjoyed by persons employed in
392other positions and that, if they find it necessary, due to the
393physical and mental limitations of their age, to retire at an
394earlier age and usually with less service, they will suffer an
395economic deprivation therefrom. Therefore, as a means of
396recognizing the peculiar and special problems of this class of
397employees, it is the intent and purpose of the Legislature to
398establish a class of retirement membership that awards more
399retirement credit per year of service than that awarded to other
400employees; however, nothing contained herein shall require
401ineligibility for special risk membership upon reaching age 60
40255.
403 Section 9. Subsection (8) of section 121.052, Florida
404Statutes, is amended to read:
405 121.052 Membership class of elected officers.-
406 (8) NORMAL RETIREMENT DATE; VESTING REQUIREMENT.-A member
407of the Elected Officers' Class shall have the same normal
408retirement date as defined in s. 121.021(29) for a member of the
409regular class of the Florida Retirement System. Any public
410service commissioner who was removed from the Elected State
411Officers' Class on July 1, 1979, after attaining at least 8
412years of creditable service in that class shall be considered to
413have reached the normal retirement date upon attaining the
414required age provided 62 as required in s. 121.021(29)(a).
415 Section 10. Subsection (1) and paragraph (a) of subsection
416(3) of section 121.091, Florida Statutes, are amended to read:
417 121.091 Benefits payable under the system.-Benefits may
418not be paid under this section unless the member has terminated
419employment as provided in s. 121.021(39)(a) or begun
420participation in the Deferred Retirement Option Program as
421provided in subsection (13), and a proper application has been
422filed in the manner prescribed by the department. The department
423may cancel an application for retirement benefits when the
424member or beneficiary fails to timely provide the information
425and documents required by this chapter and the department's
426rules. The department shall adopt rules establishing procedures
427for application for retirement benefits and for the cancellation
428of such application when the required information or documents
429are not received.
430 (1) NORMAL RETIREMENT BENEFIT.-Upon attaining his or her
431normal retirement date, the member, upon application to the
432administrator, shall receive a monthly benefit which shall begin
433to accrue on the first day of the month of retirement and be
434payable on the last day of that month and each month thereafter
435during his or her lifetime. The normal retirement benefit,
436including any past or additional retirement credit, may not
437exceed 100 percent of the average final compensation. The normal
438retirement benefit or pension payable to a member of the Florida
439Retirement System who has not attained 6 years of credited
440service under the system on or before July 1, 2010, shall not
441exceed 80 percent of his or her average final compensation.
442Overtime or any other compensation beyond base hourly or annual
443salary shall not be factored into any pension benefit. The
444amount of monthly benefit shall be calculated as the product of
445A and B, subject to the adjustment of C, if applicable, as set
446forth below:
447 (a)1. For creditable years of Regular Class service, A is:
448 a. 1.60 percent of the member's average final
449compensation, for all creditable years before October 1, 2011;
450 b. 1.44 percent of the member's average final compensation
451for all creditable years after September 30, 2011, up to the
452member's normal retirement date; or.
453 c. Upon completion of the first year after the normal
454retirement date, A is increased by 1.87 1.63 percent of the
455member's average final compensation. Following the second year
456after the normal retirement date, A is increased by 3.125 1.65
457percent of the member's average final compensation. Following
458the third year after the normal retirement date, and for
459subsequent years, A is increased by 5.00 1.68 percent of the
460member's average final compensation. This sub-subparagraph
461expires July 1, 2011.
462 2. For creditable years of special risk service, A is:
463 a. Two percent of the member's average final compensation
464for all creditable years prior to October 1, 1974;
465 b. Three percent of the member's average final
466compensation for all creditable years after September 30, 1974,
467and before October 1, 1978;
468 c. Two percent of the member's average final compensation
469for all creditable years after September 30, 1978, and before
470January 1, 1989;
471 d. Two and two-tenths percent of the member's final
472monthly compensation for all creditable years after December 31,
4731988, and before January 1, 1990;
474 e. Two and four-tenths percent of the member's average
475final compensation for all creditable years after December 31,
4761989, and before January 1, 1991;
477 f. Two and six-tenths percent of the member's average
478final compensation for all creditable years after December 31,
4791990, and before January 1, 1992;
480 g. Two and eight-tenths percent of the member's average
481final compensation for all creditable years after December 31,
4821991, and before January 1, 1993;
483 h. Three percent of the member's average final
484compensation for all creditable years after December 31, 1992;
485and
486 i. Three percent of the member's average final
487compensation for all creditable years of service after September
48830, 1978, and before January 1, 1993;
489 j. Three percent, for any special risk member who retires
490after July 1, 2000, and before October 1, 2011, or any member of
491the Special Risk Administrative Support Class entitled to retain
492the special risk normal retirement date who was a member of the
493Special Risk Class during the time period and who retires after
494July 1, 2000, and before October 1, 2011; and
495 k. Two and seven-tenths percent of the member's final
496compensation for all creditable years of service after September
49730, 2011, or any member of the Special Risk Administrative
498Support Class entitled to retain the special risk normal
499retirement date who was a member of the Special Risk Class
500during the time period and who retires after September 30, 2011.
501 3. For creditable years of Senior Management Service Class
502service after January 31, 1987, A is:
503 a. Two 2 percent of the member's average final
504compensation for all creditable years prior to October 1, 2011;
505and
506 b. One and eight-tenths percent of the member's average
507final compensation for all creditable years after September 30,
5082011, up to the member's normal retirement date.;
509 4. For creditable years of Elected Officers' Class service
510as a Supreme Court Justice, district court of appeal judge,
511circuit judge, or county court judge, A is 3 1/3 percent of the
512member's average final compensation, and for all other
513creditable service in such class, A is 3 percent of average
514final compensation.;
515 (b) B is the number of the member's years and any
516fractional part of a year of creditable service earned
517subsequent to November 30, 1970.; and
518 (c) C is the normal retirement benefit credit brought
519forward as of November 30, 1970, by a former member of an
520existing system. Such normal retirement benefit credit shall be
521determined as the product of X and Y when X is the percentage of
522average final compensation which the member would have been
523eligible to receive if the member had attained his or her normal
524retirement date as of November 30, 1970, all in accordance with
525the existing system under which the member is covered on
526November 30, 1970, and Y is average final compensation as
527defined in s. 121.021(24). However, any member of an existing
528retirement system who is eligible to retire and who does retire,
529become disabled, or die prior to April 15, 1971, may have his or
530her retirement benefits calculated on the basis of the best 5 of
531the last 10 years of service.
532 (d) A member's average final compensation shall be
533determined by formula to obtain the coverage for the 5 highest
534fiscal years' salaries, calculated as provided by rule.
535 (3) EARLY RETIREMENT BENEFIT.-Upon retirement on his or
536her early retirement date, the member shall receive an immediate
537monthly benefit that shall begin to accrue on the first day of
538the month of the retirement date and be payable on the last day
539of that month and each month thereafter during his or her
540lifetime. Such benefit shall be calculated as follows:
541 (a) The amount of each monthly payment shall be computed
542in the same manner as for a normal retirement benefit, in
543accordance with subsection (1), but shall be based on the
544member's average monthly compensation and creditable service as
545of the member's early retirement date. The benefit so computed
546shall be reduced by five-twelfths of 1 percent for each complete
547month by which the early retirement date precedes the normal
548retirement date of age 62 for a member of the Regular Class,
549Senior Management Service Class, or the Elected Officers' Class,
550and age 55 for a member of the Special Risk Class, or age 52 if
551a Special Risk member has completed 25 years of creditable
552service in accordance with s. 121.021(29)(a)2.c.(b)3.
553 Section 11. Effective July 1, 2011, paragraph (a) of
554subsection (3) and paragraph (a) of subsection (13) of section
555121.091, Florida Statutes, as amended by this act, are amended
556to read:
557 121.091 Benefits payable under the system.-Benefits may
558not be paid under this section unless the member has terminated
559employment as provided in s. 121.021(39)(a) or begun
560participation in the Deferred Retirement Option Program as
561provided in subsection (13), and a proper application has been
562filed in the manner prescribed by the department. The department
563may cancel an application for retirement benefits when the
564member or beneficiary fails to timely provide the information
565and documents required by this chapter and the department's
566rules. The department shall adopt rules establishing procedures
567for application for retirement benefits and for the cancellation
568of such application when the required information or documents
569are not received.
570 (3) EARLY RETIREMENT BENEFIT.-Upon retirement on his or
571her early retirement date, the member shall receive an immediate
572monthly benefit that shall begin to accrue on the first day of
573the month of the retirement date and be payable on the last day
574of that month and each month thereafter during his or her
575lifetime. Such benefit shall be calculated as follows:
576 (a) The amount of each monthly payment shall be computed
577in the same manner as for a normal retirement benefit, in
578accordance with subsection (1), but shall be based on the
579member's average monthly compensation and creditable service as
580of the member's early retirement date. The benefit so computed
581shall be reduced by five-twelfths of 1 percent for each complete
582month by which the early retirement date precedes the normal
583retirement date of age 62 for a member of the Regular Class,
584Senior Management Service Class, or the Elected Officers' Class,
585and age 55 for a member of the Special Risk Class, or age 52 if
586a Special Risk member has completed 25 years of creditable
587service in accordance with s. 121.021(29)(a)2.c.
588 (13) DEFERRED RETIREMENT OPTION PROGRAM.-In general, and
589subject to this section, the Deferred Retirement Option Program,
590hereinafter referred to as DROP, is a program under which an
591eligible member of the Florida Retirement System may elect to
592participate, deferring receipt of retirement benefits while
593continuing employment with his or her Florida Retirement System
594employer. The deferred monthly benefits shall accrue in the
595Florida Retirement System on behalf of the participant, plus
596interest compounded monthly, for the specified period of the
597DROP participation, as provided in paragraph (c). Upon
598termination of employment, the participant shall receive the
599total DROP benefits and begin to receive the previously
600determined normal retirement benefits. Participation in the DROP
601does not guarantee employment for the specified period of DROP.
602Participation in DROP by an eligible member beyond the initial
60360-month period as authorized in this subsection shall be on an
604annual contractual basis for all participants.
605 (a) Eligibility of member to participate in DROP.-All
606active Florida Retirement System members in a regularly
607established position, and all active members of the Teachers'
608Retirement System established in chapter 238 or the State and
609County Officers' and Employees' Retirement System established in
610chapter 122, which are consolidated within the Florida
611Retirement System under s. 121.011, are eligible to elect
612participation in DROP if:
613 1. The member is not a renewed member under s. 121.122 or
614a member of the State Community College System Optional
615Retirement Program under s. 121.051, the Senior Management
616Service Optional Annuity Program under s. 121.055, or the
617optional retirement program for the State University System
618under s. 121.35.
619 2. Except as provided in subparagraph 6., election to
620participate is made within 12 months immediately following the
621date on which the member first reaches normal retirement date,
622or, for a member who reaches normal retirement date based on
623service before he or she reaches age 65 62, or age 60 55 for
624Special Risk Class members, election to participate may be
625deferred to the 12 months immediately following the date the
626member attains age 60 57, or age 55 52 for Special Risk Class
627members. A member who delays DROP participation during the 12-
628month period immediately following his or her maximum DROP
629deferral date, except as provided in subparagraph 6., loses a
630month of DROP participation for each month delayed. A member who
631fails to make an election within the 12-month limitation period
632forfeits all rights to participate in DROP. The member shall
633advise his or her employer and the division in writing of the
634date DROP begins. The beginning date may be subsequent to the
63512-month election period but must be within the original 60-
636month participation period provided in subparagraph (b)1. When
637establishing eligibility of the member to participate in DROP,
638the member may elect to include or exclude any optional service
639credit purchased by the member from the total service used to
640establish the normal retirement date. A member who has dual
641normal retirement dates is eligible to elect to participate in
642DROP after attaining normal retirement date in either class.
643 3. The employer of a member electing to participate in
644DROP, or employers if dually employed, shall acknowledge in
645writing to the division the date the member's participation in
646DROP begins and the date the member's employment and DROP
647participation will terminate.
648 4. Simultaneous employment of a participant by additional
649Florida Retirement System employers subsequent to the
650commencement of participation in DROP is permissible if such
651employers acknowledge in writing a DROP termination date no
652later than the participant's existing termination date or the
653maximum participation period provided in subparagraph (b)1.
654 5. A DROP participant may change employers while
655participating in DROP, subject to the following:
656 a. A change of employment must take place without a break
657in service so that the member receives salary for each month of
658continuous DROP participation. If a member receives no salary
659during a month, DROP participation shall cease unless the
660employer verifies a continuation of the employment relationship
661for such participant pursuant to s. 121.021(39)(b).
662 b. Such participant and new employer shall notify the
663division of the identity of the new employer on forms required
664by the division.
665 c. The new employer shall acknowledge, in writing, the
666participant's DROP termination date, which may be extended but
667not beyond the maximum participation period provided in
668subparagraph (b)1., shall acknowledge liability for any
669additional retirement contributions and interest required if the
670participant fails to timely terminate employment, and is subject
671to the adjustment required in sub-subparagraph (c)5.d.
672 6. Effective July 1, 2001, for instructional personnel as
673defined in s. 1012.01(2), election to participate in DROP may be
674made at any time following the date on which the member first
675reaches normal retirement date. The member shall advise his or
676her employer and the division in writing of the date on which
677DROP begins. When establishing eligibility of the member to
678participate in DROP for the 60-month participation period
679provided in subparagraph (b)1., the member may elect to include
680or exclude any optional service credit purchased by the member
681from the total service used to establish the normal retirement
682date. A member who has dual normal retirement dates is eligible
683to elect to participate in either class.
684 Section 12. Paragraph (c) of subsection (3) of section
685121.4501, Florida Statutes, is amended to read:
686 121.4501 Public Employee Optional Retirement Program.-
687 (3) ELIGIBILITY; RETIREMENT SERVICE CREDIT.-
688 (c)1. Notwithstanding paragraph (b), each eligible
689employee who elects to participate in the Public Employee
690Optional Retirement Program and establishes one or more
691individual participant accounts under the optional program may
692elect to transfer to the optional program a sum representing the
693present value of the employee's accumulated benefit obligation
694under the defined benefit retirement program of the Florida
695Retirement System. Upon such transfer, all service credit
696previously earned under the defined benefit program of the
697Florida Retirement System shall be nullified for purposes of
698entitlement to a future benefit under the defined benefit
699program of the Florida Retirement System. A participant is
700precluded from transferring the accumulated benefit obligation
701balance from the defined benefit program upon the expiration of
702the period afforded to enroll in the optional program.
703 2. For purposes of this subsection, the present value of
704the member's accumulated benefit obligation is based upon the
705member's estimated creditable service and estimated average
706final compensation under the defined benefit program, subject to
707recomputation under subparagraph 3. For state employees
708enrolling under subparagraph (4)(a)1., initial estimates will be
709based upon creditable service and average final compensation as
710of midnight on June 30, 2002; for district school board
711employees enrolling under subparagraph (4)(b)1., initial
712estimates will be based upon creditable service and average
713final compensation as of midnight on September 30, 2002; and for
714local government employees enrolling under subparagraph
715(4)(c)1., initial estimates will be based upon creditable
716service and average final compensation as of midnight on
717December 31, 2002. The dates respectively specified above shall
718be construed as the "estimate date" for these employees. The
719actuarial present value of the employee's accumulated benefit
720obligation shall be based on the following:
721 a. The discount rate and other relevant actuarial
722assumptions used to value the Florida Retirement System Trust
723Fund at the time the amount to be transferred is determined,
724consistent with the factors provided in sub-subparagraphs b. and
725c.
726 b. A benefit commencement age, based on the member's
727estimated creditable service as of the estimate date. The
728benefit commencement age shall be the younger of the following,
729but shall not be younger than the member's age as of the
730estimate date:
731 (I) Age 62 or, for persons employed on or after July 1,
7322011, age 65; or
733 (II) The age the member would attain if the member
734completed 30 years of service with an employer or, for persons
735employed on or after July 1, 2011, 33 years of service with an
736employer, assuming the member worked continuously from the
737estimate date, and disregarding any vesting requirement that
738would otherwise apply under the defined benefit program of the
739Florida Retirement System.
740 c. For members of the Special Risk Class and for members
741of the Special Risk Administrative Support Class entitled to
742retain special risk normal retirement date, the benefit
743commencement age shall be the younger of the following, but
744shall not be younger than the member's age as of the estimate
745date:
746 (I) Age 55 or, for persons employed on or after July 1,
7472011, age 60; or
748 (II) The age the member would attain if the member
749completed 25 years of service with an employer, or, for persons
750employed on or after July 1, 2011, 33 years of service with an
751employer, assuming the member worked continuously from the
752estimate date, and disregarding any vesting requirement that
753would otherwise apply under the defined benefit program of the
754Florida Retirement System.
755 d. The calculation shall disregard vesting requirements
756and early retirement reduction factors that would otherwise
757apply under the defined benefit retirement program.
758 3. For each participant who elects to transfer moneys from
759the defined benefit program to his or her account in the
760optional program, the division shall recompute the amount
761transferred under subparagraph 2. not later than 60 days after
762the actual transfer of funds based upon the participant's actual
763creditable service and actual final average compensation as of
764the initial date of participation in the optional program. If
765the recomputed amount differs from the amount transferred under
766subparagraph 2. by $10 or more, the division shall:
767 a. Transfer, or cause to be transferred, from the Florida
768Retirement System Trust Fund to the participant's account in the
769optional program the excess, if any, of the recomputed amount
770over the previously transferred amount together with interest
771from the initial date of transfer to the date of transfer under
772this subparagraph, based upon effective annual interest equal to
773the assumed return on the actuarial investment which was used in
774the most recent actuarial valuation of the system, compounded
775annually.
776 b. Transfer, or cause to be transferred, from the
777participant's account to the Florida Retirement System Trust
778Fund the excess, if any, of the previously transferred amount
779over the recomputed amount, together with interest from the
780initial date of transfer to the date of transfer under this
781subparagraph, based upon 6 percent effective annual interest,
782compounded annually, pro rata based on the participant's
783allocation plan.
784 4. As directed by the participant, the board shall
785transfer or cause to be transferred the appropriate amounts to
786the designated accounts. The board shall establish transfer
787procedures by rule, but the actual transfer shall not be later
788than 30 days after the effective date of the member's
789participation in the optional program unless the major financial
790markets for securities available for a transfer are seriously
791disrupted by an unforeseen event which also causes the
792suspension of trading on any national securities exchange in the
793country where the securities were issued. In that event, such
79430-day period of time may be extended by a resolution of the
795trustees. Transfers are not commissionable or subject to other
796fees and may be in the form of securities or cash as determined
797by the state board. Such securities shall be valued as of the
798date of receipt in the participant's account.
799 5. If the board or the division receives notification from
800the United States Internal Revenue Service that this paragraph
801or any portion of this paragraph will cause the retirement
802system, or a portion thereof, to be disqualified for tax
803purposes under the Internal Revenue Code, then the portion that
804will cause the disqualification does not apply. Upon such
805notice, the state board and the division shall notify the
806presiding officers of the Legislature.
807 Section 13. Subsection (2) of section 122.02, Florida
808Statutes, is amended to read:
809 122.02 Definitions.-The following words and phrases as
810used in this chapter shall have the following meaning unless a
811different meaning is plainly required by the context:
812 (2) "Average final compensation" shall mean the average
813salary of all the 10 best contributing years of the last 15
814years of creditable service prior to retirement, or the career
815average since July 1, 1945, whichever is greater. A year shall
816be 12 running months. If there are no records to show the total
817number of years of creditable service performed by an employee,
818"average final compensation" means the average annual
819compensation for the total number of years of creditable service
820for which records exist prior to retirement, termination, or
821death. In the event that an officer or employee has not
822contributed to the retirement trust fund for at least 10 years,
823then the average final compensation shall mean the average
824salary of the last 10 years' service.
825 Section 14. Subsections (1) and (3) of section 175.032,
826Florida Statutes, are amended to read:
827 175.032 Definitions.-For any municipality, special fire
828control district, chapter plan, local law municipality, local
829law special fire control district, or local law plan under this
830chapter, the following words and phrases have the following
831meanings:
832 (1)(a) "Average final compensation" for a full-time
833firefighter means one-twelfth of the average annual compensation
834of the 5 best years of all the last 10 years of creditable
835service prior to retirement, termination, or death, or the
836career average as a full-time firefighter since July 1, 1953,
837whichever is greater. A year shall be 12 consecutive months. If
838there are no records to show the total number of years of
839creditable service performed by an employee, "average final
840compensation" means the average annual compensation for the
841total number of years of creditable service for which records
842exist prior to retirement, termination, or death or such other
843consecutive period of time as is used and consistently applied.
844 (b) "Average final compensation" for a volunteer
845firefighter means the average salary of all the 5 best years of
846the last 10 best contributing years prior to change in status to
847a permanent full-time firefighter or retirement as a volunteer
848firefighter. If there are no records to show the total number of
849years of creditable service performed by an employee, "average
850final compensation" means the average annual compensation for
851the total number of years of creditable service for which
852records exist prior to change in status to a permanent full-time
853firefighter or retirement as a volunteer firefighter or the
854career average of a volunteer firefighter, since July 1, 1953,
855whichever is greater.
856 (3) "Compensation" or "salary" means the fixed monthly
857remuneration paid a firefighter; where, as in the case of a
858volunteer firefighter, remuneration is based on actual services
859rendered, the term means the total cash remuneration received
860yearly for such services, prorated on a monthly basis. This
861shall include only base pay and shall not include any pay for
862overtime or other pay beyond base hourly or annual salary.
863 (a) A retirement trust fund or plan may use a definition
864of salary other than the definition in this subsection but only
865if the monthly retirement income payable to each firefighter
866covered by the retirement trust fund or plan, as determined
867under s. 175.162(2)(a) and using such other definition, equals
868or exceeds the monthly retirement income that would be payable
869to each firefighter if his or her monthly retirement income were
870determined under s. 175.162(2)(a) and using the definition in
871this subsection.
872 (b) Any retirement trust fund or plan which now or
873hereafter meets the requirements of this chapter shall not,
874solely by virtue of this subsection, reduce or diminish the
875monthly retirement income otherwise payable to each firefighter
876covered by the retirement trust fund or plan.
877 (a)(c) The member's compensation or salary contributed as
878employee-elective salary reductions or deferrals to any salary
879reduction, deferred compensation, or tax-sheltered annuity
880program authorized under the Internal Revenue Code shall be
881deemed to be the compensation or salary the member would receive
882if he or she were not participating in such program and shall be
883treated as compensation for retirement purposes under this
884chapter.
885 (b)(d) For any person who first becomes a member in any
886plan year beginning on or after January 1, 1996, compensation
887for any plan year shall not include any amounts in excess of the
888Internal Revenue Code s. 401(a)(17) limitation (as amended by
889the Omnibus Budget Reconciliation Act of 1993), which limitation
890of $150,000 shall be adjusted as required by federal law for
891qualified government plans and shall be further adjusted for
892changes in the cost of living in the manner provided by Internal
893Revenue Code s. 401(a)(17)(B). For any person who first became a
894member prior to the first plan year beginning on or after
895January 1, 1996, the limitation on compensation shall be not
896less than the maximum compensation amount that was allowed to be
897taken into account under the plan as in effect on July 1, 1993,
898which limitation shall be adjusted for changes in the cost of
899living since 1989 in the manner provided by Internal Revenue
900Code s. 401(a)(17)(1991).
901 Section 15. Paragraph (a) of subsection (1) of section
902175.061, Florida Statutes, is amended to read:
903 175.061 Board of trustees; members; terms of office;
904meetings; legal entity; costs; attorney's fees.-For any
905municipality, special fire control district, chapter plan, local
906law municipality, local law special fire control district, or
907local law plan under this chapter:
908 (1) In each municipality and in each special fire control
909district there is hereby created a board of trustees of the
910firefighters' pension trust fund, which shall be solely
911responsible for administering the trust fund. Effective October
9121, 1986, and thereafter:
913 (a) The membership of the board of trustees for a chapter
914plan consists of five members, two of whom, unless otherwise
915prohibited by law, must be legal residents of the municipality
916or special fire control district and must be appointed by the
917governing body of the municipality or special fire control
918district, and two of whom must be full-time firefighters as
919defined in s. 175.032 who are elected by a majority of the
920active firefighters who are members of such plan. With respect
921to any chapter plan or local law plan that, on January 1, 1997,
922allowed retired firefighters to vote in such elections, retirees
923may continue to vote in such elections. The fifth member shall
924be chosen by a majority of the previous four members as provided
925herein and may not be a member or retiree of the plan whose
926funds the board administers, and such person's name shall be
927submitted to the governing body of the municipality or special
928fire control district. Upon receipt of the fifth person's name,
929the governing body of the municipality or special fire control
930district shall, as a ministerial duty, appoint such person to
931the board of trustees. The fifth member shall have the same
932rights as each of the other four members, shall serve as trustee
933for a period of 2 years, and may succeed himself or herself in
934office. Each resident member shall serve as trustee for a period
935of 2 years, unless sooner replaced by the governing body at
936whose pleasure he or she serves, and may succeed himself or
937herself as a trustee. Each firefighter member shall serve as
938trustee for a period of 2 years, unless he or she sooner leaves
939the employment of the municipality or special fire control
940district as a firefighter, whereupon a successor shall be chosen
941in the same manner as an original appointment. Each firefighter
942may succeed himself or herself in office. The terms of office of
943the appointed and elected members may be amended by municipal
944ordinance, special act of the Legislature, or resolution adopted
945by the governing body of the special fire control district to
946extend the terms from 2 years to 4 years. The length of the
947terms of office shall be the same for all board members.
948 Section 16. Paragraph (b) of subsection (2) of section
949175.091, Florida Statutes, is amended to read:
950 175.091 Creation and maintenance of fund.-For any
951municipality, special fire control district, chapter plan, local
952law municipality, local law special fire control district, or
953local law plan under this chapter:
954 (2) Member contribution rates may be adjusted as follows:
955 (b) Firefighter member contributions may be increased by
956consent of the members' collective bargaining representative or,
957if none, by majority consent of firefighter members of the fund
958to provide greater benefits.
959
960Nothing in this section shall be construed to require adjustment
961of member contribution rates in effect on the date this act
962becomes a law, including rates that exceed 5 percent of salary,
963provided that such rates are at least one-half of 1 percent of
964salary.
965 Section 17. Effective July 1, 2011, section 175.162,
966Florida Statutes, is amended to read:
967 175.162 Requirements for retirement.-For any municipality,
968special fire control district, chapter plan, local law
969municipality, local law special fire control district, or local
970law plan under this chapter, any firefighter who completes 15 10
971or more years of creditable service as a firefighter and attains
972age 60 55, or completes 30 25 years of creditable service as a
973firefighter and attains age 57 52, and who for such minimum
974period has been a member of the firefighters' pension trust fund
975operating under a chapter plan or local law plan, is eligible
976for normal retirement benefits. Normal retirement under the plan
977is retirement from the service of the municipality or special
978fire control district on or after the normal retirement date. In
979such event, payment of retirement income will be governed by the
980following provisions of this section:
981 (1) The normal retirement date of each firefighter will be
982the first day of the month coincident with or next following the
983date on which he or she has completed 15 10 or more years of
984creditable service and attained age 60 55 or completed 30 25
985years of creditable service and attained age 57 52.
986 (2)(a) The amount of monthly retirement income payable to
987a full-time firefighter who retires on or after his or her
988normal retirement date shall be an amount equal to the number of
989his or her years of credited service multiplied by 2 percent of
990his or her average final compensation as a full-time
991firefighter. However, if current state contributions pursuant to
992this chapter are not adequate to fund the additional benefits to
993meet the minimum requirements in this chapter, only such
994incremental increases shall be required as state moneys are
995adequate to provide. Such increments shall be provided as state
996moneys become available.
997 (b) The amount of monthly retirement income payable to a
998volunteer firefighter who retires on or after his or her normal
999retirement date shall be an amount equal to the number of his or
1000her years of credited service multiplied by 2 percent of his or
1001her average final compensation as a volunteer firefighter.
1002 (3) The monthly retirement income payable in the event of
1003normal retirement will be payable on the first day of each
1004month. The first payment will be made on the firefighter's
1005normal retirement date, or on the first day of the month
1006coincident with or next following his or her actual retirement,
1007if later, and the last payment will be the payment due next
1008preceding the firefighter's death; except that, in the event the
1009firefighter dies after retirement but before he or she has
1010received retirement benefits for a period of 10 years, the same
1011monthly benefit will be paid to the beneficiary (or
1012beneficiaries) as designated by the firefighter for the balance
1013of such 15-year 10-year period. If a firefighter continues in
1014the service of the municipality or special fire control district
1015beyond his or her normal retirement date and dies prior to his
1016or her date of actual retirement, without an option made
1017pursuant to s. 175.171 being in effect, monthly retirement
1018income payments will be made for a period of 15 10 years to a
1019beneficiary (or beneficiaries) designated by the firefighter as
1020if the firefighter had retired on the date on which his or her
1021death occurred.
1022 (4) Early retirement under the plan is retirement from the
1023service of the municipality or special fire control district,
1024with the consent of the municipality or special fire control
1025district, as of the first day of any calendar month which is
1026prior to the firefighter's normal retirement date but subsequent
1027to the date as of which he or she has both attained the age of
102855 50 years and has been a member of this fund for 15 10
1029continuous years. In the event of early retirement, payment of
1030retirement income shall be governed as follows: The monthly
1031amount of retirement income payable to a firefighter who retires
1032prior to his or her normal retirement date shall be in the
1033amount computed as described in subsection (2), taking into
1034account the firefighter's credited service to his or her date of
1035actual retirement and final monthly compensation as of such
1036date, such amount of retirement income to be actuarially reduced
1037to take into account the firefighter's younger age and the
1038earlier commencement of retirement income benefits. The amount
1039of monthly income payable in the event of early retirement will
1040be paid in the same manner as in subsection (3). In no event
1041shall the early retirement reduction exceed 3 percent for each
1042year by which the member's age at retirement preceded the
1043member's normal retirement age, as provided in subsection (1).
1044 Section 18. Paragraph (a) of subsection (3) of section
1045175.351, Florida Statutes, is amended, and subsection (5) is
1046added to that section, to read:
1047 175.351 Municipalities and special fire control districts
1048having their own pension plans for firefighters.-For any
1049municipality, special fire control district, local law
1050municipality, local law special fire control district, or local
1051law plan under this chapter, in order for municipalities and
1052special fire control districts with their own pension plans for
1053firefighters, or for firefighters and police officers, where
1054included, to participate in the distribution of the tax fund
1055established pursuant to s. 175.101, local law plans must meet
1056the minimum benefits and minimum standards set forth in this
1057chapter.
1058 (3) Notwithstanding any other provision, with respect to
1059any supplemental plan municipality:
1060 (a) Section 175.032(3)(a) shall not apply, and A local law
1061plan and a supplemental plan may continue to use their
1062definition of compensation or salary in existence on the
1063effective date of this act.
1064 (5) A municipality or special fire control district may
1065close a retirement plan subject to this chapter and establish a
1066defined contribution plan for employees after a date certain.
1067Employees hired before that date may choose to transfer to the
1068defined contribution plan, but may not then transfer back to the
1069defined benefit retirement plan subject to this chapter or
1070belong to both plans simultaneously. A municipality or special
1071fire control district may elect to close an existing plan
1072subject to the provisions of this chapter and join the Florida
1073Retirement System under chapter 121 for employees based on the
1074member's date of hire. A municipality or special fire control
1075district choosing to operate under this subsection shall receive
1076the premium tax provided by this chapter for use for the defined
1077benefit plan subject to this chapter until the plan is fully
1078funded as described in s. 175.371(2), as determined by the
1079plan's actuary.
1080 Section 19. Subsections (1) and (4) of section 185.02,
1081Florida Statutes, are amended to read:
1082 185.02 Definitions.-For any municipality, chapter plan,
1083local law municipality, or local law plan under this chapter,
1084the following words and phrases as used in this chapter shall
1085have the following meanings, unless a different meaning is
1086plainly required by the context:
1087 (1) "Average final compensation" means one-twelfth of the
1088average annual compensation of all the 5 best years of the last
108910 years of creditable service prior to retirement, termination,
1090or death. A year shall be 12 consecutive months. If there are no
1091records to show the total number of years of creditable service
1092performed by an employee, "average final compensation" means the
1093average annual compensation for the total number of years of
1094creditable service for which records exist prior to retirement,
1095termination, or death.
1096 (4) "Compensation" or "salary" means the total cash
1097remuneration including "overtime" paid by the primary employer
1098to a police officer for services rendered, but not including any
1099payments for extra duty or a special detail work performed on
1100behalf of a second party employer, or any overtime compensation.
1101However, a local law plan may limit the amount of overtime
1102payments which can be used for retirement benefit calculation
1103purposes, but in no event shall such overtime limit be less than
1104300 hours per officer per calendar year.
1105 (a) Any retirement trust fund or plan which now or
1106hereafter meets the requirements of this chapter shall not,
1107solely by virtue of this subsection, reduce or diminish the
1108monthly retirement income otherwise payable to each police
1109officer covered by the retirement trust fund or plan.
1110 (a)(b) The member's compensation or salary contributed as
1111employee-elective salary reductions or deferrals to any salary
1112reduction, deferred compensation, or tax-sheltered annuity
1113program authorized under the Internal Revenue Code shall be
1114deemed to be the compensation or salary the member would receive
1115if he or she were not participating in such program and shall be
1116treated as compensation for retirement purposes under this
1117chapter.
1118 (b)(c) For any person who first becomes a member in any
1119plan year beginning on or after January 1, 1996, compensation
1120for any plan year shall not include any amounts in excess of the
1121Internal Revenue Code s. 401(a)(17) limitation (as amended by
1122the Omnibus Budget Reconciliation Act of 1993), which limitation
1123of $150,000 shall be adjusted as required by federal law for
1124qualified government plans and shall be further adjusted for
1125changes in the cost of living in the manner provided by Internal
1126Revenue Code s. 401(a)(17)(B). For any person who first became a
1127member prior to the first plan year beginning on or after
1128January 1, 1996, the limitation on compensation shall be not
1129less than the maximum compensation amount that was allowed to be
1130taken into account under the plan as in effect on July 1, 1993,
1131which limitation shall be adjusted for changes in the cost of
1132living since 1989 in the manner provided by Internal Revenue
1133Code s. 401(a)(17)(1991).
1134 Section 20. Paragraph (a) of subsection (1) of section
1135185.05, Florida Statutes, is amended to read:
1136 185.05 Board of trustees; members; terms of office;
1137meetings; legal entity; costs; attorney's fees.-For any
1138municipality, chapter plan, local law municipality, or local law
1139plan under this chapter:
1140 (1) In each municipality described in s. 185.03 there is
1141hereby created a board of trustees of the municipal police
1142officers' retirement trust fund, which shall be solely
1143responsible for administering the trust fund. Effective October
11441, 1986, and thereafter:
1145 (a) The membership of the board of trustees for chapter
1146plans consists of five members, two of whom, unless otherwise
1147prohibited by law, must be legal residents of the municipality
1148and must be appointed by the legislative body of the
1149municipality, and two of whom must be police officers as defined
1150in s. 185.02 who are elected by a majority of the active police
1151officers who are members of such plan. With respect to any
1152chapter plan or local law plan that, on January 1, 1997, allowed
1153retired police officers to vote in such elections, retirees may
1154continue to vote in such elections. The fifth member shall be
1155chosen by a majority of the previous four members and may not be
1156a member or retiree of the plan whose funds the board
1157administers, and such person's name shall be submitted to the
1158legislative body of the municipality. Upon receipt of the fifth
1159person's name, the legislative body shall, as a ministerial
1160duty, appoint such person to the board of trustees. The fifth
1161member shall have the same rights as each of the other four
1162members appointed or elected, shall serve as trustee for a
1163period of 2 years, and may succeed himself or herself in office.
1164Each resident member shall serve as trustee for a period of 2
1165years, unless sooner replaced by the legislative body at whose
1166pleasure the member serves, and may succeed himself or herself
1167as a trustee. Each police officer member shall serve as trustee
1168for a period of 2 years, unless he or she sooner leaves the
1169employment of the municipality as a police officer, whereupon a
1170successor shall be chosen in the same manner as an original
1171appointment. Each police officer may succeed himself or herself
1172in office. The terms of office of the appointed and elected
1173members of the board of trustees may be amended by municipal
1174ordinance or special act of the Legislature to extend the terms
1175from 2 years to 4 years. The length of the terms of office shall
1176be the same for all board members.
1177 Section 21. Paragraph (b) of subsection (2) of section
1178185.07, Florida Statutes, is amended to read:
1179 185.07 Creation and maintenance of fund.-For any
1180municipality, chapter plan, local law municipality, or local law
1181plan under this chapter:
1182 (2) Member contribution rates may be adjusted as follows:
1183 (b) Police officer member contributions may be increased
1184by consent of the members' collective bargaining representative
1185or, if none, by majority consent of police officer members of
1186the fund to provide greater benefits.
1187
1188Nothing in this section shall be construed to require adjustment
1189of member contribution rates in effect on the date this act
1190becomes a law, including rates that exceed 5 percent of salary,
1191provided that such rates are at least one-half of 1 percent of
1192salary.
1193 Section 22. Effective July 1, 2011, section 185.16,
1194Florida Statutes, is amended to read:
1195 185.16 Requirements for retirement.-For any municipality,
1196chapter plan, local law municipality, or local law plan under
1197this chapter, any police officer who completes 15 10 or more
1198years of creditable service as a police officer and attains age
119960 55, or completes 30 25 years of creditable service as a
1200police officer and attains age 57 52, and for such period has
1201been a member of the retirement fund is eligible for normal
1202retirement benefits. Normal retirement under the plan is
1203retirement from the service of the city on or after the normal
1204retirement date. In such event, for chapter plans and local law
1205plans, payment of retirement income will be governed by the
1206following provisions of this section:
1207 (1) The normal retirement date of each police officer will
1208be the first day of the month coincident with or next following
1209the date on which the police officer has completed 15 10 or more
1210years of creditable service and attained age 60 55 or completed
121125 years of creditable service and attained age 57 52.
1212 (2) The amount of the monthly retirement income payable to
1213a police officer who retires on or after his or her normal
1214retirement date shall be an amount equal to the number of the
1215police officer's years of credited service multiplied by 2
1216percent of his or her average final compensation. However, if
1217current state contributions pursuant to this chapter are not
1218adequate to fund the additional benefits to meet the minimum
1219requirements in this chapter, only increment increases shall be
1220required as state moneys are adequate to provide. Such
1221increments shall be provided as state moneys become available.
1222 (3) The monthly retirement income payable in the event of
1223normal retirement will be payable on the first day of each
1224month. The first payment will be made on the police officer's
1225normal retirement date, or on the first day of the month
1226coincident with or next following the police officer's actual
1227retirement, if later, and the last payment will be the payment
1228due next preceding the police officer's death; except that, in
1229the event the police officer dies after retirement but before
1230receiving retirement benefits for a period of 15 10 years, the
1231same monthly benefit will be paid to the beneficiary (or
1232beneficiaries) as designated by the police officer for the
1233balance of such 15-year 10-year period, or, if no beneficiary is
1234designated, to the estate of the police officer, as provided in
1235s. 185.162. If a police officer continues in the service of the
1236city beyond his or her normal retirement date and dies prior to
1237the date of actual retirement, without an option made pursuant
1238to s. 185.161 being in effect, monthly retirement income
1239payments will be made for a period of 15 10 years to a
1240beneficiary (or beneficiaries) designated by the police officer
1241as if the police officer had retired on the date on which death
1242occurred, or, if no beneficiary is designated, to the estate of
1243the police officer, as provided in s. 185.162.
1244 (4) Early retirement under the plan is retirement from the
1245service of the city, with the consent of the city, as of the
1246first day of any calendar month which is prior to the police
1247officer's normal retirement date but subsequent to the date as
1248of which the police officer has both attained the age of 50
1249years and completed 15 10 years of contributing service. In the
1250event of early retirement, payment of retirement income will be
1251governed as follows:
1252 (a) The early retirement date shall be the first day of
1253the calendar month coincident with or immediately following the
1254date a police officer retires from the service of the city under
1255the provisions of this section prior to his or her normal
1256retirement date.
1257 (b) The monthly amount of retirement income payable to a
1258police officer who retires prior to his or her normal retirement
1259date under the provisions of this section shall be an amount
1260computed as described in subsection (2), taking into account his
1261or her credited service to the date of actual retirement and his
1262or her final monthly compensation as of such date, such amount
1263of retirement income to be actuarially reduced to take into
1264account the police officer's younger age and the earlier
1265commencement of retirement income payments. In no event shall
1266the early retirement reduction exceed 3 percent for each year by
1267which the member's age at retirement preceded the member's
1268normal retirement age, as provided in subsection (1).
1269 (c) The retirement income payable in the event of early
1270retirement will be payable on the first day of each month. The
1271first payment will be made on the police officer's early
1272retirement date and the last payment will be the payment due
1273next preceding the retired police officer's death; except that,
1274in the event the police officer dies before receiving retirement
1275benefits for a period of 15 10 years, the same monthly benefit
1276will be paid to the beneficiary designated by the police officer
1277for the balance of such 15-year 10-year period, or, if no
1278designated beneficiary is surviving, the same monthly benefit
1279for the balance of such 10-year period shall be payable as
1280provided in s. 185.162.
1281 Section 23. Paragraph (a) of subsection (3) of section
1282185.35, Florida Statutes, is amended, and subsection (5) is
1283added to that section, to read:
1284 185.35 Municipalities having their own pension plans for
1285police officers.-For any municipality, chapter plan, local law
1286municipality, or local law plan under this chapter, in order for
1287municipalities with their own pension plans for police officers,
1288or for police officers and firefighters where included, to
1289participate in the distribution of the tax fund established
1290pursuant to s. 185.08, local law plans must meet the minimum
1291benefits and minimum standards set forth in this chapter:
1292 (3) Notwithstanding any other provision, with respect to
1293any supplemental plan municipality:
1294 (a) Section 185.02(4)(a) shall not apply, and A local law
1295plan and a supplemental plan may continue to use their
1296definition of compensation or salary in existence on the
1297effective date of this act.
1298 (5) A municipality may close a retirement plan subject to
1299this chapter and establish a defined contribution retirement
1300plan for employees hired after a date certain. Employees hired
1301before that date may choose to transfer to the defined
1302contribution plan, but may not then transfer back to the defined
1303benefit retirement plan subject to this chapter or belong to
1304both plans simultaneously. A municipality may elect to close an
1305existing plan subject to the provisions of this chapter and join
1306the Florida Retirement System under chapter 121 for employees
1307hired after a date certain. A municipality choosing to operate
1308under this subsection shall receive the premium tax provided by
1309this chapter for use for the plan subject to this chapter until
1310the plan is fully funded as described in s. 185.38(2), as
1311determined by the plan's actuary.
1312 Section 24. Section 214.101, Florida Statutes, is created
1313to read:
1314 214.101 Truth in accounting; short title; definitions.-
1315 (1) SHORT TITLE.--This chapter may be cited as the "Truth
1316in Accounting Act."
1317 (2) DEFINITIONS.-As used in this chapter, unless a
1318different meaning is plainly required by the context, the term:
1319 (a) "Amounts due other postemployment benefit plan" means
1320the unfunded actuarial accrued liability for any other
1321postemployment benefit plan, including the portion of multiple-
1322employer plans attributed to the plan sponsor.
1323 (b) "Amounts due pension fund" means the unfunded
1324actuarial accrued liability for a pension plan, including the
1325portion of a multiple-employer plan attributed to the plan
1326sponsor.
1327 (c) "Benefit enhancements" means the actuarial present
1328value of total projected benefits attributed to the estimated
1329increase in the benefits of retirees or beneficiaries granted by
1330the proposed budget, employment contracts, or proposed or
1331enacted changes to the state relating to pension plans. The
1332benefit enhancements that result from plan members' expected
1333future service amount may be reduced by the amount of specified
1334revenue sources enacted into law.
1335 (d) "Capital assets" shall be defined using Governmental
1336Accounting Standards Board concepts outlined in Governmental
1337Accounting Standards Board Statement 34.
1338 (e) "Estimated balance sheet" means the estimated
1339statement of net assets prepared using the Governmental
1340Accounting Standards Board concepts outlined in Governmental
1341Accounting Standards Board Statement 34.
1342 (f) "Estimated retirement plan's assets gain or loss"
1343means the change in the actuarial value of assets at the
1344beginning of the budget period and the actuarial value of assets
1345at the end of the budget period.
1346 (g) "Fiduciary funds" shall be defined using Governmental
1347Accounting Standards Board concepts outlined in Governmental
1348Accounting Standards Board Statement 34.
1349 (h) "Fiscal budget documents" includes the estimated
1350balance sheet, the estimated statement of activities, the
1351estimated statement of cash flow, the estimated statement of
1352fiscal balance, the estimated statement of fiscal deficit, and
1353the estimated financial state of the state.
1354 (i) "Governmentwide generally accepted accounting
1355principles" means the accounting standards used in the
1356preparation of the governmentwide financial statements of the
1357state and any political subdivision thereof which is required to
1358prepare financial statements, using Governmental Accounting
1359Standards Board concepts outlined in the Governmental Accounting
1360Standards Board Statement 34.
1361 (j) "Increase or decrease in other postemployment benefits
1362due" means the difference between any other postemployment
1363benefit plan's estimated actuarial accrued liability at the
1364beginning of the budget period and estimated actuarial accrued
1365liability at the end of the budget period.
1366 (k) "Increase or decrease in pension benefits due" means
1367the difference between a pension plan's estimated actuarial
1368accrued liability at the beginning of the budget period and the
1369estimated actuarial accrued liability at the end of the budget
1370period.
1371 (l) "Net pension obligation," "net pension asset," "net
1372other postemployment benefit obligation," "net other
1373postemployment asset," "actuarial value of assets," "actuarial
1374accrued liability," "unfunded actuarial accrued liability," and
1375"actuarial present value of total projected benefits" shall be
1376defined using Governmental Accounting Standards Board concepts
1377outlined in Governmental Accounting Standards Board Statements
137845, 25, and 27, as amended by Governmental Accounting Standards
1379Board Statement 50.
1380 (m) "Off-balance-sheet other postemployment benefit
1381liabilities" means the difference between any other
1382postemployment benefit plan's estimated unfunded actuarial
1383accrued liability and the estimated net other postemployment
1384benefit obligation or other postemployment benefit asset
1385included in the estimated balance sheet.
1386 (n) "Off-balance-sheet pension liabilities" means the
1387difference between a pension plan's estimated unfunded actuarial
1388accrued liability and the estimated net pension obligation or
1389net pension asset included in the estimated balance sheet.
1390 (o) "Other postemployment benefit plan" means any benefit
1391plan other than a pension plan provided to employees or their
1392families after retirement, termination, or death.
1393 (p) "Pension plan" means a retirement plan provided to
1394employees by the state or any political subdivision of the state
1395as provided by law.
1396 Section 25. Section 214.102, Florida Statutes, is created
1397to read:
1398 214.102 Reporting requirements.-The Chief Financial
1399Officer shall, for the state, and an official designated by the
1400governing body of a political subdivision of the state shall,
1401for each political subdivision, issue the following reports each
1402year using data from the most recently completed fiscal year:
1403 (1) Statement of fiscal balance, which shall include the:
1404 (a) Columns used in the estimated balance sheet.
1405 (b) Total net assets as determined in the estimated
1406balance sheet.
1407 (c) Off-balance-sheet pension liability.
1408 (d) Off-balance-sheet other postemployment benefit
1409liability.
1410 (e) Resulting fiscal balance, which shall be calculated by
1411subtracting the sum of all liabilities in paragraphs (a)-(d)
1412from the sum of all assets in paragraphs (a)-(d).
1413 (2) Statement of fiscal deficit, which shall include the:
1414 (a) Columns used in the estimated statement of activities.
1415 (b) Change in net assets, as determined in the statement
1416of activities.
1417 (c) Benefit enhancements.
1418 (d) Estimated retirement plan's gain or loss.
1419 (e) Increase or decrease in pension benefits due.
1420 (f) Increase or decrease in other postemployment benefits
1421due.
1422 (g) Resulting fiscal deficit, which shall be calculated by
1423subtracting all increases in liabilities in paragraphs (a)-(f)
1424from all decreases in liabilities in paragraphs (a)-(f).
1425 (3) Estimated financial state of the state, estimated
1426financial state of the county, or estimated financial state of
1427the municipality, or other similar report where the title
1428reflects the type of political subdivision releasing the report,
1429which shall include:
1430 (a) The total revenues collected in each of the previous 3
1431fiscal years.
1432 (b) The most recent estimate of the total revenues to be
1433collected in the current and next 3 fiscal years.
1434 (c) A summary of the dollar amount of the reporting body's
1435assets, broken down to include capital assets and other assets,
1436and a total of all assets which shall be labeled "what we own."
1437 (d) A summary of the dollar amount of the reporting body's
1438liabilities, broken down to include outstanding general
1439obligation and special revenue bonds, amounts due pension funds,
1440amounts due other postemployment benefit plans, other
1441liabilities, and a total of all liabilities which shall be
1442labeled "our bills."
1443 (e) A statement of the estimated financial state of the
1444reporting body, which shall be calculated by subtracting the
1445amount described in paragraph (d) from the amount described in
1446paragraph (c).
1447 Section 26. Section 214.103, Florida Statutes, is created
1448to read:
1449 214.103 Date of submission.-The reports required by this
1450chapter shall be submitted by the Chief Financial Officer to the
1451Governor, the Speaker of the House of Representatives, and the
1452President of the Senate on or before February 28 of each year or
1453by the official designated by the governing body of a political
1454subdivision of the state to the governing body of that political
1455subdivision no later than 120 days prior to the beginning of
1456each fiscal year of that political subdivision. These reports
1457shall also be posted online on a website owned and maintained by
1458the body receiving the report and shall be available to the
1459public.
1460 Section 27. If any unit of government makes a good faith
1461determination that, in complying with the provisions of this
1462act, the additional administrative costs will exceed the savings
1463estimated by the increased employee contributions provided for,
1464then that unit of government may postpone compliance with the
1465provisions of this act until it determines that the estimated
1466benefits will exceed the estimated costs.
1467 Section 28. Except as otherwise expressly provided in this
1468act, this act shall take effect July 1, 2010.
CODING: Words stricken are deletions; words underlined are additions.
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