Bill Text: FL S0184 | 2014 | Regular Session | Introduced
Bill Title: Florida Retirement System
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-03-20 - Withdrawn from further consideration, companion bill(s) passed, see HB 5005 (Ch. 2014-54) [S0184 Detail]
Download: Florida-2014-S0184-Introduced.html
Florida Senate - 2014 SB 184 By Senator Brandes 22-00256-14 2014184__ 1 A bill to be entitled 2 An act relating to the Florida Retirement System; 3 amending s. 121.051, F.S.; providing for compulsory 4 membership in the Florida Retirement System Investment 5 Plan for employees in the Elected Officers’ Class or 6 the Senior Management Service Class initially enrolled 7 after a specified date; amending s. 121.052, F.S.; 8 prohibiting members of the Elected Officers’ Class 9 from joining the Senior Management Service Class after 10 a specified date; amending s. 121.055, F.S.; 11 prohibiting an elected official eligible for 12 membership in the Elected Officers’ Class from 13 enrolling in the Senior Management Service Class or in 14 the Senior Management Service Optional Annuity 15 Program; closing the Senior Management Optional 16 Annuity Program to new members by a specified date; 17 amending s. 121.4501, F.S.; requiring certain 18 employees initially enrolled in the Florida Retirement 19 System on or after a specified date to be compulsory 20 members of the investment plan; conforming provisions 21 to changes made by the act; amending ss. 238.072 and 22 413.051, F.S.; conforming cross-references; providing 23 that the act fulfills an important state interest; 24 providing an effective date. 25 26 Be It Enacted by the Legislature of the State of Florida: 27 28 Section 1. Subsections (3) through (9) of section 121.051, 29 Florida Statutes, are redesignated as subsections (4) through 30 (10), respectively, and a new subsection (3) is added to that 31 section, to read: 32 121.051 Participation in the system.— 33 (3) INVESTMENT PLAN MEMBERSHIP COMPULSORY.— 34 (a) Employees initially enrolled on or after July 1, 2014, 35 in positions covered by the Elected Officers’ Class or the 36 Senior Management Service Class are compulsory members of the 37 investment plan, except those eligible to withdraw from the 38 system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those 39 eligible for optional retirement programs under paragraph 40 (1)(a), paragraph (2)(c), or s. 121.35. Investment plan 41 membership continues if there is subsequent employment in a 42 position covered by another membership class. Membership in the 43 pension plan is not permitted except as provided in s. 44 121.591(2). Employees initially enrolled in the Florida 45 Retirement System by June 30, 2014, may retain their membership 46 in the pension plan or investment plan and are eligible to use 47 the election opportunity specified in s. 121.4501(4)(f). 48 Employees initially enrolled on or after July 1, 2014, are not 49 eligible to use the election opportunity specified in s. 50 121.4501(4)(f). 51 (b) Employees eligible to withdraw from the system under s. 52 121.052(3)(d) or s. 121.055(1)(b)2. may choose to withdraw from 53 the system or to participate in the investment plan as provided 54 in these sections. Employees eligible for optional retirement 55 programs under paragraph (2)(c) or s. 121.35 may choose to 56 participate in the optional retirement program or the investment 57 plan as provided in this paragraph or this section. Eligible 58 employees required to participate pursuant to paragraph (1)(a) 59 in the optional retirement program as provided under s. 121.35 60 must participate in the investment plan when employed in a 61 position not eligible for the optional retirement program. 62 Section 2. Paragraph (c) of subsection (3) of section 63 121.052, Florida Statutes, is amended to read: 64 121.052 Membership class of elected officers.— 65 (3) PARTICIPATION AND WITHDRAWAL, GENERALLY.—Effective July 66 1, 1990, participation in the Elected Officers’ Class shall be 67 compulsory for elected officers listed in paragraphs (2)(a)-(d) 68 and (f) assuming office on or after said date, unless the 69 elected officer elects membership in another class or withdraws 70 from the Florida Retirement System as provided in paragraphs 71 (3)(a)-(d): 72 (c) On or before June 30, 2014, any elected officer may, 73 within 6 months after assuming office, or within 6 months after 74 this act becomes a law for serving elected officers, elect 75 membership in the Senior Management Service Class as provided in 76 s. 121.055 in lieu of membership in the Elected Officers’ Class. 77 Any such election made by a county elected officer shall have no 78 effect upon the statutory limit on the number of nonelective 79 full-time positions that may be designated by a local agency 80 employer for inclusion in the Senior Management Service Class 81 under s. 121.055(1)(b)1. 82 Section 3. Paragraph (f) of subsection (1) and paragraph 83 (c) of subsection (6) of section 121.055, Florida Statutes, are 84 amended to read: 85 121.055 Senior Management Service Class.—There is hereby 86 established a separate class of membership within the Florida 87 Retirement System to be known as the “Senior Management Service 88 Class,” which shall become effective February 1, 1987. 89 (1) 90 (f) Effective July 1, 1997, through June 30, 2014: 91 1. Except as provided in subparagraphssubparagraph3. and 92 4., an elected state officer eligible for membership in the 93 Elected Officers’ Class under s. 121.052(2)(a), (b), or (c) who 94 elects membership in the Senior Management Service Class under 95 s. 121.052(3)(c) may, within 6 months after assuming office or 96 within 6 months after this act becomes a law for serving elected 97 state officers, elect to participate in the Senior Management 98 Service Optional Annuity Program, as provided in subsection (6), 99 in lieu of membership in the Senior Management Service Class. 100 2. Except as provided in subparagraph 3., an elected 101 officer of a local agency employer eligible for membership in 102 the Elected Officers’ Class under s. 121.052(2)(d) who elects 103 membership in the Senior Management Service Class under s. 104 121.052(3)(c) may, within 6 months after assuming office, or 105 within 6 months after this act becomes a law for serving elected 106 officers of a local agency employer, elect to withdraw from the 107 Florida Retirement System, as provided in subparagraph (b)2., in 108 lieu of membership in the Senior Management Service Class. 109 3. A retiree of a state-administered retirement system who 110 is initially reemployed in a regularly established position on 111 or after July 1, 2010, as an elected official eligible for the 112 Elected Officers’ Class may not be enrolled in renewed 113 membership in the Senior Management Service Class or in the 114 Senior Management Service Optional Annuity Program as provided 115 in subsection (6), and may not withdraw from the Florida 116 Retirement System as a renewed member as provided in 117 subparagraph (b)2., as applicable, in lieu of membership in the 118 Senior Management Service Class. 119 4. On or after July 1, 2014, an elected officer eligible 120 for membership in the Elected Officers’ Class may not be 121 enrolled in the Senior Management Service Class or in the Senior 122 Management Service Optional Annuity Program as provided in 123 subsection (6). 124 (6) 125 (c) Participation.— 126 1. An eligible employee who is employed on or before 127 February 1, 1987, may elect to participate in the optional 128 annuity program in lieu of participating in the Senior 129 Management Service Class. Such election must be made in writing 130 and filed with the department and the personnel officer of the 131 employer on or before May 1, 1987. An eligible employee who is 132 employed on or before February 1, 1987, and who fails to make an 133 election to participate in the optional annuity program by May 134 1, 1987, shall be deemed to have elected membership in the 135 Senior Management Service Class. 136 2. Except as provided in subparagraph 6., an employee who 137 becomes eligible to participate in the optional annuity program 138 by reason of initial employment commencing after February 1, 139 1987, may, within 90 days after the date of commencing 140 employment, elect to participate in the optional annuity 141 program. Such election must be made in writing and filed with 142 the personnel officer of the employer. An eligible employee who 143 does not within 90 days after commencing employment elect to 144 participate in the optional annuity program shall be deemed to 145 have elected membership in the Senior Management Service Class. 146 3. A person who is appointed to a position in the Senior 147 Management Service Class and who is a member of an existing 148 retirement system or the Special Risk or Special Risk 149 Administrative Support Classes of the Florida Retirement System 150 may elect to remain in such system or class in lieu of 151 participating in the Senior Management Service Class or optional 152 annuity program. Such election must be made in writing and filed 153 with the department and the personnel officer of the employer 154 within 90 days after such appointment. An eligible employee who 155 fails to make an election to participate in the existing system, 156 the Special Risk Class of the Florida Retirement System, the 157 Special Risk Administrative Support Class of the Florida 158 Retirement System, or the optional annuity program shall be 159 deemed to have elected membership in the Senior Management 160 Service Class. 161 4. Except as provided in subparagraph 5., an employee’s 162 election to participate in the optional annuity program is 163 irrevocable if the employee continues to be employed in an 164 eligible position and continues to meet the eligibility 165 requirements set forth in this paragraph. 166 5. Effective from July 1, 2002, through September 30, 2002, 167 an active employee in a regularly established position who has 168 elected to participate in the Senior Management Service Optional 169 Annuity Program has one opportunity to choose to move from the 170 Senior Management Service Optional Annuity Program to the 171 Florida Retirement System Pension Plan. 172 a. The election must be made in writing and must be filed 173 with the department and the personnel officer of the employer 174 before October 1, 2002, or, in the case of an active employee 175 who is on a leave of absence on July 1, 2002, within 90 days 176 after the conclusion of the leave of absence. This election is 177 irrevocable. 178 b. The employee shall receive service credit under the 179 pension plan equal to his or her years of service under the 180 Senior Management Service Optional Annuity Program. The cost for 181 such credit is the amount representing the present value of that 182 employee’s accumulated benefit obligation for the affected 183 period of service. 184 c. The employee must transfer the total accumulated 185 employer contributions and earnings on deposit in his or her 186 Senior Management Service Optional Annuity Program account. If 187 the transferred amount is not sufficient to pay the amount due, 188 the employee must pay a sum representing the remainder of the 189 amount due. The employee may not retain any employer 190 contributions or earnings from the Senior Management Service 191 Optional Annuity Program account. 192 6. A retiree of a state-administered retirement system who 193 is initially reemployed on or after July 1, 2010, may not renew 194 membership in the Senior Management Service Optional Annuity 195 Program. 196 7. Effective July 1, 2014, the Senior Management Service 197 Optional Annuity Program is closed to new members. Members 198 enrolled in the Senior Management Service Optional Annuity 199 Program on or before June 30, 2014, may retain their membership 200 in the annuity program. 201 Section 4. Subsection (1) and paragraph (g) of subsection 202 (4) of section 121.4501, Florida Statutes, are amended, and 203 paragraph (h) is added to subsection (4) of that section, to 204 read: 205 121.4501 Florida Retirement System Investment Plan.— 206 (1) The Trustees of the State Board of Administration shall 207 establish a defined contribution program called the “Florida 208 Retirement System Investment Plan” or “investment plan” for 209 members of the Florida Retirement System under which retirement 210 benefits will be provided for eligible employees who elect to 211 participate in the program and for employees initially enrolled 212 on or after July 1, 2014, in positions covered by the Elected 213 Officers’ Class or the Senior Management Service Class. 214 Employees initially enrolled on or after July 1, 2014, in 215 positions covered by the Elected Officers’ Class or the Senior 216 Management Service Class are compulsory members of the 217 investment plan unless otherwise eligible to withdraw from the 218 system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or to 219 participate in an optional retirement program under s. 220 121.051(1)(a), s. 121.051(2)(c), or s. 121.35. Investment plan 221 membership continues if there is subsequent employment in a 222 position covered by another membership class for employees 223 initially enrolled on or after July 1, 2014, in positions 224 covered by the Elected Officers’ Class or the Senior Management 225 Service Class. The retirement benefits shall be provided through 226 member-directed investments, in accordance with s. 401(a) of the 227 Internal Revenue Code and related regulations. The employer and 228 employee shall make contributions, as provided in this section 229 and ss. 121.571 and 121.71, to the Florida Retirement System 230 Investment Plan Trust Fund toward the funding of benefits. 231 (4) PARTICIPATION; ENROLLMENT.— 232 (g) After the period during which an eligible employee had 233 the choice to elect the pension plan or the investment plan, or 234 the month following the receipt of the eligible employee’s plan 235 election, if sooner, the employee shall have one opportunity, at 236 the employee’s discretion, to choose to move from the pension 237 plan to the investment plan or from the investment plan to the 238 pension plan. Eligible employees may elect to move between plans 239 only if they are earning service credit in an employer-employee 240 relationship consistent with s. 121.021(17)(b), excluding leaves 241 of absence without pay. Effective July 1, 2005, such elections 242 are effective on the first day of the month following the 243 receipt of the election by the third-party administrator and are 244 not subject to the requirements regarding an employer-employee 245 relationship or receipt of contributions for the eligible 246 employee in the effective month, except when the election is 247 received by the third-party administrator. This paragraph is 248 contingent upon approval by the Internal Revenue Service. This 249 paragraph is not applicable to compulsory investment plan 250 members under paragraph (h). 251 1. If the employee chooses to move to the investment plan, 252 the provisions of subsection (3) govern the transfer. 253 2. If the employee chooses to move to the pension plan, the 254 employee must transfer from his or her investment plan account, 255 and from other employee moneys as necessary, a sum representing 256 the present value of that employee’s accumulated benefit 257 obligation immediately following the time of such movement, 258 determined assuming that attained service equals the sum of 259 service in the pension plan and service in the investment plan. 260 Benefit commencement occurs on the first date the employee is 261 eligible for unreduced benefits, using the discount rate and 262 other relevant actuarial assumptions that were used to value the 263 pension plan liabilities in the most recent actuarial valuation. 264 For any employee who, at the time of the second election, 265 already maintains an accrued benefit amount in the pension plan, 266 the then-present value of the accrued benefit is deemed part of 267 the required transfer amount. The division must ensure that the 268 transfer sum is prepared using a formula and methodology 269 certified by an enrolled actuary. A refund of any employee 270 contributions or additional member payments made which exceed 271 the employee contributions that would have accrued had the 272 member remained in the pension plan and not transferred to the 273 investment plan is not permitted. 274 3. Notwithstanding subparagraph 2., an employee who chooses 275 to move to the pension plan and who became eligible to 276 participate in the investment plan by reason of employment in a 277 regularly established position with a state employer after June 278 1, 2002; a district school board employer after September 1, 279 2002; or a local employer after December 1, 2002, must transfer 280 from his or her investment plan account, and from other employee 281 moneys as necessary, a sum representing the employee’s actuarial 282 accrued liability. A refund of any employee contributions or 283 additional participant payments made which exceed the employee 284 contributions that would have accrued had the member remained in 285 the pension plan and not transferred to the investment plan is 286 not permitted. 287 4. An employee’s ability to transfer from the pension plan 288 to the investment plan pursuant to paragraphs (a)-(d), and the 289 ability of a current employee to have an option to later 290 transfer back into the pension plan under subparagraph 2., shall 291 be deemed a significant system amendment. Pursuant to s. 292 121.031(4), any resulting unfunded liability arising from actual 293 original transfers from the pension plan to the investment plan 294 must be amortized within 30 plan years as a separate unfunded 295 actuarial base independent of the reserve stabilization 296 mechanism defined in s. 121.031(3)(f). For the first 25 years, a 297 direct amortization payment may not be calculated for this base. 298 During this 25-year period, the separate base shall be used to 299 offset the impact of employees exercising their second program 300 election under this paragraph. The actuarial funded status of 301 the pension plan will not be affected by such second program 302 elections in any significant manner, after due recognition of 303 the separate unfunded actuarial base. Following the initial 25 304 year period, any remaining balance of the original separate base 305 shall be amortized over the remaining 5 years of the required 306 30-year amortization period. 307 5. If the employee chooses to transfer from the investment 308 plan to the pension plan and retains an excess account balance 309 in the investment plan after satisfying the buy-in requirements 310 under this paragraph, the excess may not be distributed until 311 the member retires from the pension plan. The excess account 312 balance may be rolled over to the pension plan and used to 313 purchase service credit or upgrade creditable service in the 314 pension plan. 315 (h)1. All employees initially enrolled on or after July 1, 316 2014, in positions covered by the Elected Officers’ Class or the 317 Senior Management Service Class are compulsory members of the 318 investment plan, except those eligible to withdraw from the 319 system under s. 121.052(3)(d) or s. 121.055(1)(b)2., or those 320 eligible for optional retirement programs under s. 321 121.051(1)(a), s. 121.051(2)(c), or s. 121.35. Employees 322 eligible to withdraw from the system under s. 121.052(3)(d) or 323 s. 121.055(1)(b)2. may choose to withdraw from the system or to 324 participate in the investment plan as provided in those 325 sections. Employees eligible for optional retirement programs 326 under s. 121.051(2)(c) or s. 121.35, except as provided in s. 327 121.051(1)(a), may choose to participate in the optional 328 retirement program or the investment plan as provided in those 329 sections. Investment plan membership continues if there is 330 subsequent employment in a position covered by another 331 membership class. Membership in the pension plan is not 332 permitted except as provided in s. 121.591(2). Employees 333 initially enrolled in the Florida Retirement System on or before 334 June 30, 2014, may retain their membership in the pension plan 335 or investment plan and are eligible to use the election 336 opportunity specified in paragraph (g). 337 2. Employees initially enrolled in positions covered by the 338 Elected Officers’ class or the Senior Management Service Class 339 on or after July 1, 2014, are not permitted to use the election 340 opportunity specified in paragraph (g). 341 Section 5. Section 238.072, Florida Statutes, is amended to 342 read: 343 238.072 Special service provisions for extension 344 personnel.—All state and county cooperative extension personnel 345 holding appointments by the United States Department of 346 Agriculture for extension work in agriculture and home economics 347 in this state who are joint representatives of the University of 348 Florida and the United States Department of Agriculture, as 349 provided in s. 121.051(8)121.051(7), who are members of the 350 Teachers’ Retirement System, chapter 238, and who are prohibited 351 from transferring to and participating in the Florida Retirement 352 System, chapter 121, may retire with full benefits upon 353 completion of 30 years of creditable service and shall be 354 considered to have attained normal retirement age under this 355 chapter, any law to the contrary notwithstanding. In order to 356 comply with the provisions of s. 14, Art. X of the State 357 Constitution, any liability accruing to the Florida Retirement 358 System Trust Fund as a result of the provisions of this section 359 shall be paid on an annual basis from the General Revenue Fund. 360 Section 6. Subsection (11) of section 413.051, Florida 361 Statutes, is amended to read: 362 413.051 Eligible blind persons; operation of vending 363 stands.— 364 (11) Effective July 1, 1996, blind licensees who remain 365 members of the Florida Retirement System pursuant to s. 366 121.051(7)(b)1.121.051(6)(b)1.shall pay any unappropriated 367 retirement costs from their net profits or from program income. 368 Within 30 days after the effective date of this act, each blind 369 licensee who is eligible to maintain membership in the Florida 370 Retirement System under s. 121.051(7)(b)1.121.051(6)(b)1., but 371 who elects to withdraw from the system as provided in s. 372 121.051(7)(b)3.121.051(6)(b)3., must, on or before July 31, 373 1996, notify the Division of Blind Services and the Department 374 of Management Services in writing of his or her election to 375 withdraw. Failure to timely notify the divisions shall be deemed 376 a decision to remain a compulsory member of the Florida 377 Retirement System. However, if, at any time after July 1, 1996, 378 sufficient funds are not paid by a blind licensee to cover the 379 required contribution to the Florida Retirement System, that 380 blind licensee shall become ineligible to participate in the 381 Florida Retirement System on the last day of the first month for 382 which no contribution is made or the amount contributed is 383 insufficient to cover the required contribution. For any blind 384 licensee who becomes ineligible to participate in the Florida 385 Retirement System as described in this subsection, no creditable 386 service shall be earned under the Florida Retirement System for 387 any period following the month that retirement contributions 388 ceased to be reported. However, any such person may participate 389 in the Florida Retirement System in the future if employed by a 390 participating employer in a covered position. 391 Section 7. The Legislature finds that a proper and 392 legitimate state purpose is served when employees and retirees 393 of the state and its political subdivisions, and the dependents, 394 survivors, and beneficiaries of such employees and retirees, are 395 extended the basic protections afforded by governmental 396 retirement systems. These persons must be provided benefits that 397 are fair and adequate and that are managed, administered, and 398 funded in an actuarially sound manner, as required by s. 14, 399 Article X of the State Constitution and part VII of chapter 112, 400 Florida Statutes. Therefore, the Legislature determines and 401 declares that this act fulfills an important state interest. 402 Section 8. This act shall take effect July 1, 2014.